Elizabeth Jones, Michael Carlow’s long-time girl friend and accomplice in the one-time entrepreneur’s post-prison scheme to thwart the IRS, was sentenced today to one year house arrest.
Ms. Jones, 53, also was ordered to pay the IRS $221,566 in back taxes and to perform 500 hours of community service.
U.S. District Judge David S. Cercone said the one-year house arrest, restitution and four years of probation were appropriate. Federal guidelines called for a sentence of 18 to 24 months.
"While this is a serious matter, the defendant does not have a prior criminal record," the judge said. "She has cooperated with the government."
Federal prosecutor Kenneth Vert told the judge Ms. Jones assisted and personally profited from her involvement in Mr. Carlow’s scheme. In a sentencing memorandum federal prosecutors filed last week, they said they had "serious concerns" about certain aspects of the Upper St. Clair resident’s cooperation.
Mr. Carlow, 62, was sentenced last month to 35 months in prison for obstructing federal tax collection efforts.
Ms. Jones’ sentence closes the latest chapter in the history of one of Western Pennsylvania’s most enduring white-collar criminals.
Mr. Carlow previously served six years in federal prison after pleading guilty in 1996 to charges connected to a $31 million check-kiting scheme he masterminded. The checks were kited to hide the true condition of a group of companies he owned, including Pittsburgh Brewing and D.L. Clark, the maker of the Clark bar.
Federal prosecutors alleged that after being released from prison in 2002, Mr. Carlow acquired a series of companies, listing Ms. Jones as the owner in order to conceal assets and divert income. They were both indicted in April 2011 on more serious charges.
Mr. Carlow faced up to 22 years in prison after being indicted for tax evasion, conspiracy, and filing false tax returns for 2003 through 2006. He sought to have his indictment thrown out because a former white-collar defense attorney who took part in preliminary discussions about representing him later took a job as a federal prosecutor in Pittsburgh and was assigned to his case.
After prosecutors in Pittsburgh were replaced by prosecutors from the U.S. Justice Department’s tax division, Mr. Carlow pleaded guilty in January to the lesser charge of obstruction.
Ms. Jones originally was indicted for conspiracy and two counts of filing false tax returns. Free on bond since her arrest, she pleaded guilty to conspiracy in August 2011, when prosecutors agreed to drop the two tax-related charges in exchange for her cooperation.
Len Boselovic: firstname.lastname@example.org or 412-263-1941.