Prosecution switches hands in Carlow case
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U.S. Attorney David J. Hickton is handing over prosecution of ex-felon Michael Carlow to U.S. Justice Department tax attorneys after Mr. Carlow complained his defense was compromised because a former Reed Smith attorney he met with later became a federal prosecutor and was assigned to Mr. Carlow's case.
Meanwhile, Mr. Carlow, who was indicted in April 2011 on six tax-related charges, now wants the charges dismissed. He contends assigning former Reed Smith attorney Tonya S. Goodman as a prosecutor violated his due process rights.
The developments in the 14-month-old case were disclosed in documents filed Friday in U.S. District Court, Downtown.
In his filing, Mr. Hickton disputed the version of the story that Mr. Carlow's attorneys gave the court when they asked that Mr. Hickton's entire staff be prohibited from prosecuting the case.
The objection was based on a meeting between Mr. Carlow and Efrem M. Grail, a Reed Smith attorney who specializes in defending white-collar criminals. Ms. Goodman attended that meeting, during which various strategies for defending Mr. Carlow were discussed, according to a motion filed June 15 by Martin A. Dietz and Tina O. Miller, who are representing Mr. Carlow.
Their motion said the meeting took place after Mr. Carlow was indicted April 13, 2011. Friday, Mr. Hickton said the meeting occurred in May 2010, 11 months before Mr. Carlow was indicted.
Ms. Goodman was assigned to Mr. Carlow's case after she left Reed Smith and joined Mr. Hickton's staff in April. She withdrew from the case June 15.
The indictment charges Mr. Carlow and his longtime girlfriend, Elizabeth G. Jones, with tax charges related to a string of companies Mr. Carlow managed after being released from federal prison in 2002. He served six years after pleading guilty in 1996 to bank and tax fraud charges related to a $31 million check-kiting scheme that victimized PNC Bank.
In the current case, federal prosecutors allege that Mr. Carlow nominally put Ms. Jones in charge of the companies he acquired after leaving prison, but that he actually managed their affairs. Mr. Carlow underreported his income from those companies, and failed to report assets and income he was required to disclose to federal authorities as part of his 1996 plea agreement, according to the indictment.
Following his April 2011 indictment, Mr. Carlow pleaded not guilty and is free on a $25,000 bond. Ms. Jones pleaded guilty to conspiracy in August and is free on a $25,000 bond.
Their case is being heard by U.S. District Court Judge David S. Cercone.
On Friday, Mr. Hickton asked the judge to dismiss Mr. Carlow's motion to disqualify his office. He said the request is moot now that Justice Department tax attorneys will take charge of the case.
In an additional filing Friday, Mr. Carlow's attorney said replacing Mr. Hickton's office with the tax attorneys does not undo the damage already done to his case.
First Published June 30, 2012 12:00 am