Uniontown native wants tax evasion charges dismissed
A federal judge scheduled a status conference for Thursday to determine what will be argued during a later hearing to dismiss an indictment for tax evasion filed against a former Uniontown businessman previously convicted of bilking millions from a bank in a check-kiting scheme.
In April, Michael Carlow, 61, was charged with defrauding the Internal Revenue Service out of more than $6 million in taxes, interest and penalties by hiding assets and income since 2000. Additionally, he is charged with filing fraudulent tax returns for 2003 to 2006.
A co-defendant in the case, Elizabeth G. Jones, is charged with conspiring with Carlow to defraud the IRS and for filing fraudulent tax returns for a company she allegedly used as part of the scheme.
His attorneys have alleged that he consulted with a different defense attorney before hiring them, and one of those attorneys became a deputy federal prosecutor earlier this year. That woman, Tonya Goodman, was briefly assigned to prosecute the case against Carlow.
Defense attorneys Martin A. Dietz and Tina O. Miller have argued that the case against Carlow should be dismissed because Goodman’s assignation to the case violated privilege. In court filings, they questioned if things Carlow may have said during a consultation where Goodman was present for a portion could have prejudiced him.
“The per se prejudice from the due process violation cannot be undone and there is no remedy short of dismissal that will sufficiently address the violation. The indictment against Mr. Carlow should be dismissed,” Dietz wrote.
U.S. Attorney David J. Hickton has recused prosecutors in the state’s western district from handling the case, which is now being prosecuted by attorneys from the Tax Division of the U.S. Department of Justice.
U.S. Assistant Attorney General Kathryn Keneally from the Tax Division called dismissal an “unnecessary and extreme remedy.”
She noted that the attorneys now prosecuting the case do not know Goodman and have never spoken or corresponded with her, nor have they received any information from her.
Carlow, a Uniontown native, was previously sentenced to eight years in federal prison for a check-kiting scheme that cost PNC Bank more than $31.3 million in the 1990s. He pleaded guilty in 1996 to tax evasion conspiracy, filing false tax returns and bank fraud. Authorities charged he used two sets of books, legitimate ones and fake ones.
That left him with with court-ordered repayment of taxes and other penalties.
In this new case, authorities allege that Carlow found a way to funnel his income through Jones so that he could avoid repayment and penalties.
A hearing on the motion to dismiss is scheduled before U.S. District Judge David S. Cercone for Sept. 20.
During that hearing, Dietz and Miller have indicated that they plan to present testimony from an ethics expert from Yale Law School.
That hearing was initially scheduled for this week, but the professor was unavailable, according to court filings.
In place of that hearing this week, Cercone will conduct a status conference with both sides to determine what will be argued at the hearing next week.