In January 2009, US prosecutors charged former Pennsylvania judges, Mark Ciavarella Jr. of the Luzerne County Juvenile Court and Michael Conahan of the Luzerne County Court of Common Pleas, with fraud and tax evasion in connection with receiving $2.8 million in kickbacks in return for sending teenage offenders to two privately-run juvenile facilities – PA Child Care and Western PA Child Care. The judges allegedly accepted money from Robert Powell, a co-owner of the facilities, and Robert Mericle, the builder of the facilities, in return for imposing harsh sentences on juveniles brought before their courts and ensuring that juvenile offenders were sent to PA Child Care facilities. Between 2003-2006, over 2,000 juveniles, including children as young as eight years old and many first-time offenders, were sentenced for minor crimes such as petty theft and jaywalking. Former Judge Ciavarella sentenced juvenile defenders at a much higher rate than other judges in Pennsylvania at the time. Several of the individuals sentenced have died by suicide or overdoses since the lawsuits began. The Pennsylvania Supreme Court has thrown out over 4,000 convictions impacting 2,300 juveniles.

In September 2009, a federal grand jury returned a 48-count indictment against the judges, including racketeering, extortion, bribery, money laundering, fraud and tax violations. Judge Ciavarella was accused of routinely depriving youth defendants of their right to counsel and ordering teenage offenders into detention even when probation officers did not recommend it. He was sentenced to 28 years in prison and was ordered to pay $1.17 million in restitution. In May 2013, a US appeals court upheld all but one of the convictions of Mark Ciavarella. Judge Conahan was sentenced to 17 years in prison. He was released in 2020 due to the COVID-19 pandemic, and was ordered to serve the rest of his sentence at home.

In June 2009, Robert Powell was criminally charged in the Scranton District Court with failing to report a felony and being an accessory to a conspiracy, and in July he pleaded guilty to both charges. Powell served 18 months in prison. In September 2009, Robert Mericle pleaded guilty to failing to report a felony. Mericle failed to disclose to federal authorities that he paid more than $2 million to the judges as finder's fees for the PA Child Care facilities. In April 2014, Mericle was sentenced to one year in prison, received a $250,000 fine and was ordered to perform 100 hours of community service.

The children and the parents impacted by this “kids-for-cash” scheme filed a class action lawsuit in June 2009 against the judges, Powell, Mericle, PA Child Care and Western PA Child Care seeking monetary damages for the abuses they suffered. In December 2011, the parties announced a partial settlement in this class action when Mericle agreed to pay $17.7 million to the plaintiffs. In August 2015, the plaintiffs and Powell agreed on a settlement of $4.75 million. In August 2022, the US District Court ordered the former judges to pay $106 million in compensatory damages and $100 million in punitive damages to a class of almost 300 individuals.

-"Kids-for-cash judges ordered to pay more than $200M", Michael Rubinkam, AP News, 17 Aug 2022

- "Pennsylvania Seeks to Close Books on "Kids for Cash" Scandal", Jon Schuppe, NBC News, 12 Aug 2015

-"Mericle Sentenced to Federal Prison", Dave Bohman, WNEP, 25 Apr 2014

- "Builder Gets Prison in ‘Kids for Cash' Scandal", Michael Rubinkam, NBC Philadelphia, 25 Apr 2014

-"Mericle agrees to $17M settlement", Dave Janoski, Times-Tribune, 17 Dec 2011

- "Ex-jurists plea, still free", Terrie Morgan-Besecker, Times Leader, 16 Sep 2011

- "Ex-US judge pleads guilty to child prison scam", BBC News, 23 Jul 2010

-"Mericle pleads guilty", Terrie Morgan-Besecker, Times Leader, 3 Sep 2009

- "Mericle pleads guilty in kids-for-cash scandal", Dave Janoski, Citizens Voice, 2 Sep 2009

- "Plea Agreement by 2 Judges Is Rejected in Pennsylvania", Ian Urbina, New York Times, 31 Jul 2009

-"US judges admit taking kickbacks", BBC News, 13 Feb 2009

- Juvenile Law Center [counsel for victims]: Luzerne Kids-For-Cash Scandal (includes links to legal documents for class action)

- [PDF] USA v Michael T. Conahan and Mark A. Ciavarella US District Court for Middle District of Pennsylvania, 9 Sep 2009 [Indictment]
- [PDF] USA v Robert K.Mericle, US District Court for Middle District of Pennsylvania, 9 June 2009, 31 Jul 2009 [Plea agreement]
- [PDF] USA v Michael T. Conahan and Mark A. Ciavarella, US District Court for Middle District of Pennsylvania, 30 Jul 2009 [Memorandum and Order]
- [PDF] USA v Robert J.Powell, US District Court for Middle District of Pennsylvania, 9 Jun 2009 [Information]
- [PDF] USA v Michael T. Conahan and Mark A. Ciavarella, US District Court for Middle District of Pennsylvania, 26 Jan 2009 [Information]