Michael P. Carlow now contests tax charges after serving six years for check kiting
Michael P. Carlow, facing a federal indictment after serving six years in federal prison for engineering a massive check-kiting scheme, is trying to play a get-out-of-jail free card.
Mr. Carlow is asking U.S. District Court Judge David S. Cercone to dismiss an April 2011, six-count indictment on tax charges. He alleges that U.S. Attorney David J. Hickton violated his rights by assigning Assistant U.S. Attorney Tonya Goodman, a former Reed Smith attorney, to his case.
Lawyers for Mr. Carlow say Ms. Goodman sat in on meetings their client had with Efrem Grail, a Reed Smith attorney Mr. Carlow considered hiring to defend him. Mr. Carlow did not hire Mr. Grail, and Ms. Goodman -- a former federal prosecutor in Washington, D.C. -- subsequently left Reed Smith to join Mr. Hickton's staff.
Mr. Carlow argues Ms. Goodman could use anything she learned about his case while she was at Reed Smith against him, which would violate his attorney-client privilege. Courts have ruled the privilege extends to defendants who end up hiring another attorney.
Attorneys for Mr. Carlow, 61, have subpoenaed Mr. Hickton, Ms. Goodman and two other prosecutors in the office, as well as Mr. Grail and IRS Special Agent Cynthia Pfeifer, who could be called to testify Sept. 20, when Judge Cercone considers Mr. Carlow's allegations that his due process rights have been violated.
Prosecutors say that just isn't so.
Legal ethics experts and lawyers who represent clients accused of white-collar crimes find it surprising -- and troubling -- that Ms. Goodman would be assigned to help prosecute Mr. Carlow. They said prosecutors usually go out of their way to avoid even the perception of conflicts. They also point out that defendants use whatever tactics they can to make their case.
But the experts doubt that whatever occurred after Ms. Goodman joined Mr. Hickton's office will be enough for the charges against Mr. Carlow to be dismissed.
"Clearly, something dysfunctional happened here," said Fordham University law professor Bruce Green. "It's so clear cut that she couldn't work on the case. She clearly can't do it if she learned confidential information about the case from this defendant."
Mr. Carlow's solution -- dismissing charges that could put him behind bars for years -- is excessive, according to University of California law professor Rory Little.
"Whatever the facts may be, the remedy of dismissing an indictment is almost certainly not proper," he said.
Mr. Carlow pleaded guilty to bank and tax fraud charges in 1996. He was released from prison in 2002.
He and his longtime girlfriend, Elizabeth Jones of Upper St. Clair, were indicted on tax charges last year. The indictment alleges Mr. Carlow underreported his income from companies he owned after leaving prison, and failed to report assets and income he was required to disclose to federal authorities as part of his 1996 plea agreement.
Mr. Carlow pleaded not guilty and is free on a $25,000 bond. Ms. Jones pleaded guilty to conspiracy in August 2011, has not been sentenced and is free on a $25,000 bond.
In a court filing, prosecutors point out that Mr. Carlow originally said "the only effective remedy" for Ms. Goodman's involvement was to disqualify Mr. Hickton's entire office. Only when that happened and Mr. Hickton turned the case over to attorneys in the U.S. Department of Justice's tax division did Mr. Carlow ask for the charges to be dropped, they said.
The new prosecutors also stated that they have never spoken to or corresponded with Ms. Goodman and do not know anything about what Mr. Carlow said during his meeting at Reed Smith. Ms. Pfeifer, the IRS agent, said the same in an affidavit filed with the court.
"None of the people currently prosecuting this case are even potentially 'tainted' with privileged information," the prosecutors said in a July 17 filing.
Court records indicate Ms. Goodman was assigned to the case May 29 and withdrew June 15, the same day Mr. Carlow challenged her involvement.
Lawyers who move from private practice to the prosecutor's office are obligated to disclose any potential conflicts. When and how that happens varies from office to office, said Richard Blake, a former federal prosecutor now in private practice in Cleveland.
One issue at the Sept. 20 hearing will be whether Ms. Goodman disclosed that she met with Mr. Carlow at Reed Smith and, if she did, why Mr. Hickton assigned her to the case.
Another will be whether information Ms. Goodman learned from Mr. Carlow while she was at Reed Smith was passed on to other prosecutors and investigators working the case. Such information could be used to obtain new evidence or prepare witnesses. Court documents indicate Mr. Carlow's attorneys are worried Ms. Goodman passed on information she learned about his defense strategy, something that would help them plot their strategy.
Whatever information about Mr. Carlow's case Ms. Goodman learned while she was in private practice is knowledge that she would not have "without an attorney-client privilege," Mr. Blake said. She would violate Mr. Carlow's rights if she provided that information to federal prosecutors and agents, he said.
Peter Vaira, a former federal prosecutor now in private practice in Philadelphia, said Judge Cercone will have to determine whether Ms. Goodman passed on any information that would harm Mr. Carlow's ability to defend himself. He was surprised that Ms. Goodman was assigned to the case because of the potential conflict.
"This will get a very scrupulous look," Mr. Vaira said. "This comes up now and then, but not too often because the feds are very cautious about that."
First Published September 9, 2012 12:00 am