A day after he and his housemate were indicted on federal tax evasion charges, Michael P. Carlow was at his sparse office in a closed Neville Island cement plant.
In the past 20 years, Carlow has gone from the heights of the Frick Building, Downtown, to a federal prison in Morgantown, W.Va., to the drab office near Neville Island's southeastern tip.
Along the way, he went from being called a savior of several struggling companies to the man responsible for their corpses, including the D.L. Clark Co. of Clark Bar fame, Pittsburgh Brewing and its Iron City Beer, and City Pride Bakery -- viewed as the model for a rebirth of manufacturing in Pittsburgh.
On Wednesday, a federal grand jury indicted Carlow, 60, of Upper St. Clair and his housemate, Elizabeth G. Jones, 50, on charges of tax evasion and conspiracy. The nine-count indictment claims the pair used a series of companies to hide Carlow's assets to prevent the Internal Revenue Service from seizing his money and properties to satisfy the $6.4 million he still owes in unpaid taxes, penalties and interest from his 1990s business dealings.
The news elated some and dredged up bitter memories for others.
Chuck Geiger, 67, of Brighton Heights is still angry about Carlow's role in the demise of City Pride, an employee-owned Lawrenceville business that grew out of the closure of 100-year-old Braun bakery.
Geiger and 43 other former Braun employees had pooled their money and their sweat to line up public and private investors, get letters of intent from Giant Eagle, Shop 'n Save and other potential customers, and build the bakery from the ground up. Investors included the state, which kicked in about $1.1 million, and a group of nuns, he said.
"We spent a couple of years working around the clock to build it up," he said.
Then, almost overnight, Carlow gained control of the company in 1993, Geiger said. Eleven months later, Carlow shut it down.
"He ruined everything," Geiger said.
Carlow spent six years in prison after he pleaded guilty in May 1996 to eight charges, including bank fraud, tax evasion, wire fraud and embezzling from an employee benefit fund. The charges came out of a $31 million check-kiting scheme Carlow used to fuel his purchases.
Sitting in a paper-strewn office powered by a portable generator, Carlow on Thursday declined to talk on the record. Wearing a long-sleeved Ralph Lauren polo shirt, bluejeans and running shoes, he politely fended off questions while sitting at a worn meeting table.
The office lies a couple of hundred yards from a padlocked double gate watched by a security guard. The guard and Carlow were the only two people in evidence at the plant that GMI Land Co. bought from Kosmos Cement Co. in June 2007.
Several of Carlow's more recent business ventures, allegedly orchestrated through Jones, have suffered similar fates.
In 2008, Platinum Funding Group of New York funneled $25 million to Jones for the purchase of Cumberland Valley Fabricators, a metal shop in Maryland, and Waddell Construction, a Northern Virginia contractor -- two firms that annually combined for more than $20 million in revenues, records show.
Both companies soon plummeted into insolvency. Platinum founder Eyal Levy was elated yesterday when he learned from a Trib reporter that Carlow and Jones had been charged.
"That's fantastic!" said Levy. "They stole from us. It is about time."
Levy estimated that Platinum lost more than $1 million in the deal the venture capital firm made with Jones that was brokered through Carlow.
Richard Waddell, founder of Waddell Construction, said Carlow snookered him, too.
"I really don't want to talk about it," he said. "But everyone needs to understand that he took me for $1.5 million."
Downtown attorney Richard J. Parks said Florida-based Utica Leasco, an equipment rental company, is in for nearly $3 million with Jones for the former Neville Island cement plant, and his clients have not been paid anything by Jones in 30 months. The company wants either its money back or the property to be sold in a sheriff's sale.
"We've been trying to get a solution for 2 1/2 years for this, and Carlow is still there," said Parks. "That's how slowly the system works."
Hearing that Carlow was selling parts of the plant for scrap, Utica Leasco sent a crew to inspect the 11-acre site. The crew discovered that much of the salvage had indeed been trucked away, Parks said.
A court order allows Neville Island Supply, another Carlow company, to grind slag aggregate to make cement, but the stainless steel flails inside the drum that do the grinding were sold for scrap and so was the copper wiring needed to power the equipment, according to Parks.
Carlow first came to Pittsburgh's attention in 1991 when he bought the D.L. Clark Co. and seemingly rescued its trademark Clark Bar from extinction. The next year, he bought Pittsburgh Brewing, which made Iron City Beer. His stated intent was to turn the floundering companies around, and civic leaders hailed him as a savior of the hometown brands.
At the same time, Geiger and his colleagues had City Pride bakery up and running. While the company was not perfect, Geiger doesn't believe its financial condition was as bad as press stories at the time made it sound. He doesn't know directly because he was in charge of shipping and receiving rather than finances, but he knows they were busy and their customers were happy.
Their efforts attracted national attention, and Geiger ended up traveling to Chicago and New York to talk with other bakery employees trying to save their companies, and he was interviewed by ABC News anchor Peter Jennings.
"As far as I'm concerned, we were doing pretty good," Geiger said.
When Carlow gained control of the company, he brought in his own people, and sales fell when the bakery started producing inferior bread, Geiger said. Carlow said at the time that the company had lost $4 million over the 11 months he owned it.
Read more: Indicted capitalist Carlow crushed businesses, spirits - Pittsburgh Tribune-Review http://www.pittsburghlive.com/x/pittsburghtrib/news/pittsburgh/s_732403.html#ixzz1JZFiWufM
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