Michael Carlow, a resident of Pittsburgh, Pa., was sentenced today to serve 35 months in prison for corruptly endeavoring to obstruct the Internal Revenue Service (IRS), the Justice Department and IRS announced. The sentence was imposed by U.S. District Judge David Cercone for the Western District of Pennsylvania.
Carlow pleaded guilty to tax obstruction on Jan. 4, 2013. In an earlier case, Carlow pleaded guilty in 1996 to bank fraud and tax fraud in federal court and was sentenced to eight years in prison. After his release in 2002, Carlow resided with his girlfriend, Elizabeth Jones, in Pittsburgh.
According to documents filed in the case, the IRS assessed more than $6 million in overdue taxes, interest and penalties against Carlow for the years 1992 through 1996. However, from 2000 through 2011, in order to thwart efforts by the IRS to collect what he owed, Carlow concealed his assets and income through Jones and numerous nominee corporations. According to documents filed in the case, Carlow maintained a secret interest in various corporations and had fees and royalties paid to Jones rather than to himself. He also failed to report his ownership and control of corporate assets to the U.S. Probation Office and the IRS. Carlow filed false U.S. individual income tax returns for 2003-2006 and failed to file U.S. individual income tax returns from 2008 through 2011. In August 2011, Jones pleaded guilty to her conduct related to acting as a nominee for Carlow. Sentencing for Jones is scheduled for Dec. 18, 2013.
Kathryn Keneally, Assistant Attorney General for the department’s Tax Division, commended the investigative efforts of IRS - Criminal Investigation Special Agents, who investigated the case, and Tax Division Trial Attorneys Kenneth Vert and Jeffrey McLellan, who are prosecuting the case.