Pittsburgh white-collar criminal Michael Carlow sentenced

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Michael P. Carlow, who served six years in prison for perpetrating what a federal judge called “vast and pervasive” fraud, was sentenced today to 35 months in prison for obstructing federal tax collection efforts.

U.S. District Judge David S. Cercone did not make repaying back taxes a condition of Mr. Carlow’s sentence.

Federal prosecutors had sought restitution of $10.1 million in back taxes and penalties, including $6.4 million related to his prior conviction. They told Judge Cercone that the statute of limitations on using liens, garnishments and other traditional means of collecting those taxes has expired and that making restitution a condition of his sentence was the only way to collect from Mr. Carlow.

The maximum sentence the judge could have imposed was 36 months. He also did not impose a penalty on Mr. Carlow, saying the defendant was unable to pay one.

“The sentence adequately reflects the seriousness of the offense,” Judge Cercone said.

The punishment comes more than two years after Mr. Carlow, 62, one of Western Pennsylvania’s more enduring white collar criminals, was indicted on far more serious charges that were dropped after he accused U.S. Attorney David J. Hickton of misconduct.

A six-count indictment in April 2011 alleged Mr. Carlow began orchestrating his second offense in 2000, two years before he completed serving time for his first offense. In 1996, Mr. Carlow pleaded guilty to bank fraud and tax charges related to a $31 million check-kiting scheme.

The 2011 indictment alleged Mr. Carlow hid assets and income he was required to disclose to federal authorities as part of his 1996 plea agreement. Those charges could have made Mr. Carlow’s second prison stretch as long as 22 years.

Mr. Carlow has been free on a $25,000 bond since the 2011 indictment.

Following the indictment, Mr. Carlow sought to have the charges thrown out because Mr. Hickton, the top federal prosecutor in Pittsburgh, hired a former white-collar defense attorney who previously took part in preliminary discussions about representing him, then assigned her to Mr. Carlow’s case.

Mr. Carlow said that violated his attorney-client privilege.

Mr. Hickton excused his entire office from the case, which was assigned to prosecutors from the U.S. Justice Department’s tax division.

Mr. Carlow’s attorneys had asked for less than the three-year maximum. They supplied Judge Cercone with letters of support from Mr. Carlow’s family, friends and employer, who cited the Uniontown native’s strong work ethic, his dedication to his family, and the selfless support he has provided to them and others.

About a dozen family members and friends attended the sentencing hearing.

“I look at my father as a man who has overcome many obstacles to keep pushing forward,” wrote his son, Anthony. “He has proven that time and again, when ‘the going gets tough, the tough get going.’”

Clifford Wise, chairman of Specialty Steel Products, said he hired Mr. Carlow to work at his Braddock transportation company, where Mr. Carlow convinced him to develop a program for hiring ex-inmates.

“I would invite him to share my fox hole any time,” Mr. Wise wrote.

But victims of Mr. Carlow and some former associates said the former Uniontown High School quarterback is more persistent than most creditors and law enforcement officials he comes up against. They said he frustrates them by shifting assets around to various companies, a process outlined in the 2011 indictment, until they grow weary of pursuing him.

One former associate summed up his method of operation as “always trying to sneak the sun up past the rooster.”

Elizabeth Jones, Mr. Carlow’s long-time companion, was also implicated in the scheme. Federal prosecutors said Mr. Carlow put her nominally in charge of businesses he formed after being released from prison in 2002. The Upper St. Clair woman has been free on bond since pleading guilty to a conspiracy charge in August 2011.

Ms. Jones had been scheduled to be sentenced today as well. But court records indicate her attorney intends to make a case that Ms. Jones cooperated with the government’s investigation of Mr. Carlow. Because of that effort, her sentencing has been postponed until Dec. 18.


Len Boselovic: lboselovic@post-gazette.com or 412-263-1941.

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