A scandal has hit the US law community after a lawyer and several judges were found guilty of fraud and bribery.
Lawyer, Robert Powell, paid cash bribes to judges so that they would send juvenile delinquents to his juvenile facilities, which then funded a lavish lifestyle.
Powell, 49, has pleaded guilty to two felonies and is to relinquish his interest in a yacht and a corporate jet funded by the centres.
Under plea bargaining, Powell is assisting federal prosecutors in the Luzerne County corruption probe, which has resulted in a slew of criminal charges, including guilty pleas from two top former county judges.
The former judges, Mark Ciavarella and Michael Conahan, pleaded guilty in February to failing to disclose and pay taxes on more than US$2.6 million in payments from Powell and a developer of the two centers; they have agreed to serve seven years and three months in a federal prison.
In his plea agreement, Powell admitted that he created phony records to help the ex-judges hide the illegal income.
He also admitted paying "tens of thousands of dollars in cash" to Conahan.
Powell claims that the judges forced him into making the payments according to his attorney, Mark Sheppard from Montgomery, McCracken, Walker, & Rhoads in Philadelphia.
Sheppard stated that Powell had no knowledge of any impropriety by Ciavarella in sentencing juveniles to the centers.
"It was never an agreement for kids for cash," Sheppard said.
Federal prosecutors claim, the judges worked to eliminate competition for the centers and to secure for them county contracts worth tens of millions of dollars.
Powell was a well-known attorney, successful both as a trial lawyer and operator of his juvenile centers, which he co-owned with Gregory Zappala, an investment banker. Zappala, who has since bought Powell's share and not been accused of any wrongdoing.
The centers charged high fees to the county, and Powell used the profits to fund a flash lifestyle. He also arranged for the centers to make interest-free loans worth millions of dollars to a web of companies he controlled, according to a state audit.
Meanwhile, the Pennsylvania Supreme Court has authorised a judge to dismiss hundreds and possibly thousands of criminal cases against juveniles because Ciavarella failed to inform them of their right to an attorney or disclose his interest in the centers.
The judges have argued that they are immune from civil liability for actions they took while serving as judge, and are expected to file motions asking that the suits be dismissed.