Disgraced Former Democrat Mayor Pugh Pled Guilty To Wire Fraud and Tax Evasion, Faces 35 Years

Local WBOY had more:

The disgraced former mayor of Baltimore pleaded guilty Thursday to federal conspiracy and tax evasion charges involving sales of her self-published children’s books, a case that exposed anew the depths of corruption in Maryland’s largest city.

Catherine Pugh pleaded guilty in federal court in Baltimore to conspiracy to commit wire fraud, conspiracy to defraud the government and two counts of tax evasion. She pleaded not guilty to seven counts of wire fraud that were included in the indictment unsealed a day earlier.

The case centered on sales of her self-published “Healthy Holly” books to nonprofits and foundations to promote her political career and fund her run for mayor. Pugh, a veteran Democratic politician who was elected mayor in 2016, resigned under pressure in May.

Pugh faces up to 35 years in prison at her scheduled Feb. 27 sentencing. U.S. Attorney Robert Hur said she could be sentenced to about five years based on sentencing guidelines, but a judge would make the final determination. Hur added that Pugh’s admissions of guilt “demonstrated that she betrayed the trust placed on her.”

Pugh only spoke to answer questions from the judge, mostly resting her face on her hands and occasionally speaking with her attorney.

“I do,” the ex-mayor said after U.S. District Judge Deborah Chasanow asked her whether she agreed that several facts presented by prosecutors were true, including how books were shuffled from a city warehouse.

Wearing a pinstriped dark coat and scarf, Pugh silently walked out of the courthouse afterward, flanked by attorneys, before leaving in a waiting SUV.

Defense attorney Steven Silverman said in a statement hours later that the former mayor decided to forego a long trial that “would drain essential government resources and cause further distraction from the serious issues” the region faces. He added: “Ms. Pugh sincerely apologizes to all of those that she let down, most especially the citizens of Baltimore whom she had the honor to serve in multiple capacities for decades.”

Prosecutors in court Thursday explained how Pugh, helped by her aide Gary Brown Jr., double-sold the illustrated paperbacks and failed to deliver them to institutions they were purchased for, including the Baltimore City Public Schools. They said Pugh used the proceeds to fund straw donations to her mayoral campaign and to renovate a house.

Assistant U.S. Attorney Martin Clarke detailed how the University of Maryland Medical System — one of the state’s largest employers — came to be Pugh’s biggest book customer. The system paid Pugh a total of $500,000 for 100,000 copies that were meant to be distributed to schoolchildren, but about 60,000 of those books were sent to a city warehouse and a Pugh office from where thousands were later removed to give to other customers.

Pugh never delivered the other 40,000 books the health system purchased for city schools. The system wrote the first check for the books in 2011 and the last one last year.

Pugh, 69, had previously served in the state Senate, where she sat on a committee that funded the medical system. She also sat on the hospital network’s board from 2001 until the scandal erupted in March.

The system described some of the purchases as “grants” in federal filings. Pugh returned the last $100,000 payment and described the deal as a “regrettable mistake” after the scheme was uncovered.

Brown and another city employee, Roslyn Wedington, have pleaded guilty to conspiracy to commit wire fraud, conspiracy to defraud the government and filing a false tax return. Their sentencing hearing hasn’t been scheduled.

Pugh became Baltimore’s second mayor in less than a decade to step down because of scandal. Former Mayor Sheila Dixon left office in 2010 as part of a plea deal for misappropriating about $500 in gift cards meant for needy families.

And from NPR:

Former Baltimore Mayor Catherine Pugh pleaded guilty to corruption charges on Thursday, a day after federal prosecutors unsealed an indictment accusing her of using a fraudulent children's book business to enrich herself and fuel her political career.

Pugh, 69, a Democrat who took office in 2016, acknowledged her guilt to conspiracy to commit wire fraud and conspiracy to defraud the government and two counts of tax evasion.

The deal to plead guilty on four of the 11 counts she was indicted on sets Pugh up for a sentencing hearing scheduled for Feb. 27. Prosecutors said they will recommend to the judge that Pugh be sent to prison for five years.

"She betrayed the trust placed in her by the public," U.S. Attorney for Maryland Robert Hur said after the court hearing in Baltimore. "We need dedication and professionalism from our leaders, not fraud and corruption."

Prosecutors accused Pugh of earning nearly $800,000 from a self-published children's book series known as Healthy Holly that promoted exercise and nutritional eating though stories of an African American girl.

But the problem was thousands of books that nonprofits and foundations ordered to distribute in schools and day cares to promote healthy choices and combat obesity were never delivered to the city's children.

Instead, authorities say she took books that were already purchased and resold them. Pugh then funneled those proceeds into her own political campaigns and used the cash to purchase and renovate a house in Baltimore.

In particular, Pugh had $35,800 in checks written for her books cashed and turned them into political donations in other peoples' names, also known as "straw donors," ahead of mayoral election in 2016.