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Parties squabble over court schedule in 'kids for cash' civil suit

| Wednesday, Aug. 13, 2014, 7:22 p.m.

A Pittsburgh investment banker worries that he may not be able to recover the money he seeks from his former business partner if a federal judge delays a hearing in a civil lawsuit related to the “kids for cash” scandal, according to federal court documents.

Gregory Zappala and several companies he controls claim that Robert Powell and others cost them millions of dollars and ruined their reputations in a kickback scheme that landed Powell and two Luzerne County judges in federal prison.

Zappala wants U.S. District Judge Joy Flowers Conti to prevent Powell from touching an estimated $150 million to $200 million in attorney fees headed Powell's way from a settlement in an unrelated environmental lawsuit.

The settlement money should be set aside to cover any damage award Zappala wins in his lawsuit, his lawyer claims. Conti has scheduled a hearing on the motion to freeze the money for Aug. 22.

Lawyers for Powell and the other respondents argue that Zappala's lawyers have filed more than 1,000 pages in the lawsuit and they need more time to respond. Because the earliest Powell could receive the settlement fees is late October, delaying the hearing to Oct. 8 wouldn't harm Zappala's interests, they say in court documents.

Zappala's response claims that Powell has received millions of dollars from the case and “seeks extra time to dissipate or hide” the fees.

Conti held a status conference Wednesday but has not ruled on the motion to delay the hearing.

Powell and Zappala co-owned the two detention facilities where judges sent juveniles in exchange for kickbacks from Powell. Zappala, the brother of Allegheny County District Attorney Stephen A. Zappala Jr., was not charged in the criminal case and was dropped as a defendant in a civil case filed by hundreds of children and their families.

Brian Bowling is a staff writer for Trib Total Media. He can be reached at 412-325-4301 or bbowling@tribweb.com.

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