A well-known Allentown, Pa., lawyer was indicted by a federal grand jury last week on charges of fabricating wills to add himself as a beneficiary after his brother, also a lawyer, and sister-in-law were killed in a February 2007 plane crash.
The indictment charges that attorney John Karoly Jr., 58, conspired with his son, John "J.P." Karoly III, 28, and a doctor, John J. Shane, 72, to present fake wills in Northampton County Orphans' Court that showed Shane as the sole witness.
But John Karoly's lawyer, Robert Goldman of Fox Rothschild, said that none of the three are guilty and that Karoly was targeted because he is a prominent lawyer who has successfully sued police departments.
Goldman, in a press release issued Friday, said the indictment "marks the first time in the history of the FBI that they directed their focus and energies to take sides in a family dispute to investigate and prosecute a will contest matter."
According to the indictment, John Karoly and his brother, Peter J. Karoly, had practiced law together until March 1986 when they dissolved their firm, Karoly & Karoly, due to "unhappy differences."
The indictment says Peter Karoly and his wife, Lauren Angstadt, a dentist, later drafted wills that "generally divided their estates among their siblings, but which excluded defendant John Karoly as an heir."
On Feb. 2, 2007, Peter Karoly, 53, and Angstadt, 51, died along with pilot Mike Milot of Germansville, Pa., when their small plane crashed attempting to land in rain and fog in New Bedford, Mass.
The indictment charges that John Karoly requested a delay in probating the wills, claiming that his brother and sister-in-law had executed updated wills in 2006 that gave John Karoly a significant portion of their multimillion-dollar estate.
But the new wills were fraudulent, the grand jury charged, and were designed to seize proceeds of the estates from the rightful heirs.
"The defendants conspired in a fraudulent scheme to forge the wills of Peter Karoly and Lauren Angstadt in order to unlawfully benefit from their tragic deaths," Acting U.S. Attorney Laurie Magid said in a statement. "Their actions were not only illegal, they subverted the true intentions of the victims."
According to the indictment, Karoly told a lawyer who was named as trustee in the valid wills that Karoly would notify Angstadt's family members about the existence of Angstadt's will.
But the indictment charges that Karoly instead "falsely stated to family members that there were no wills for Peter J. Karoly and Lauren B. Angstadt, despite his knowledge that there were such wills."
The indictment says Karoly later told Angstadt's sister that Peter Karoly had given him a sealed packet of documents which he had placed in a storage area without looking at them.
Karoly later attempted to persuade his adopted cousin, identified in court papers only as "J.F.," to sign the fake wills as a witness, the indictment charges.
The indictment says Karoly had already persuaded Shane to sign both fake wills. Shane is a doctor who had performed expert witness services for both John and Peter Karoly and had "a social relationship" with Peter Karoly and Angstadt, according to the indictment.
According to the indictment, Karoly phoned J.F. in mid-February 2007 and arranged a meeting that was also attended by J.P. Karoly and Shane.
The indictment alleges that Karoly asked J.F. to sign the fake will of Peter Karoly as a witness to the will, "if [J.F.] felt comfortable doing it," but that J.F. "refused to sign it."
Karoly later claimed that he had discovered the wills for both his brother and sister-in-law in a storage facility, the indictment charges.
In response to the indictment, Goldman said in a statement that the case was being litigated in Northampton County Orphans' Court, "and would have been resolved by now had the government not turned this civil case into a federal criminal prosecution."
Goldman said that during the past year, prosecutors have "refused to tell us what evidence they were considering so that it has been impossible for us to strike back at the false claims."
While the case was before the grand jury, he said, the defense never had an opportunity to cross-examine any prosecution witnesses to challenge their "bogus allegations."
"We look forward to meeting any accuser head-on in court and rely on the American jury as the last protector of individual rights against a powerful government," Goldman said in the statement.
Goldman also said "there may be some who were angered by Mr. Karoly's successful lawsuits against errant police officers and now cheer the announced charges," but predicted that, when the case goes to trial, "the broader community will see the case for what it is."
Karoly has been involved in a number of high-profile cases over the years and is known for his work representing plaintiffs in police brutality cases.
One of the largest and most widely publicized of them was the case in which Karoly represented the family, fiancée and landlord of John Hirko Jr., who was shot 11 times and killed by Bethlehem police during a 1997 drug raid, according to reports in The Morning Call of Allentown.
The case was followed closely by local news outlets and received national attention. It eventually settled for nearly $7.9 million.
In 2007, Karoly represented former Penn State running back Austin Scott, who was accused of rape and sexual assault, according to The Morning Call. The case also garnered national headlines. The charges were later dropped and Karoly and Scott threatened to sue the accuser and law enforcement.
But research of past press reports and accounts by attorneys who have encountered Karoly paint the lawyer as someone who is no stranger to conflict. In 2006, according to The Morning Call, he was charged with criminally conspiring to aid his client, builder Dennis Slayton, in avoiding capture on a bail violation. The charges were later dropped.
West Chester, Pa. attorney Samuel C. Stretton -- and ethics columnist for The Legal Intelligencer's sister paper, Pennsylvania Law Weekly -- said he has known Karoly since the two attended Dickinson College together. Stretton said that he always found Karoly to be "very likable" but admitted the attorney had a way of making enemies.
"I always thought it was a great tragedy for John," he said. "He had all this talent, but at times he's rubbed people the wrong way."
Stretton said he represented Karoly in a civil suit against the city accusing three members of the Monroe County district attorney's office of violating a state wiretapping law, but Stretton added he eventually resigned from the case.
"Unfortunately John and I had some differences," he said.
But Stretton said that when he first heard the accusations that Karoly had forged his brother's will, he was skeptical because it wouldn't seem Karoly would need the money.
"It wouldn't have made any sense from a business standpoint to do it," he said.
Reporter Zack Needles contributed to this report.
