Ex-Mayor Catherine Pugh Pleads Guilty To Fraud Conspiracy

BALTIMORE, MD — Former Baltimore Mayor Catherine Pugh pleaded guilty to some of the federal charges against her Thursday, one day after her indictment was unsealed. A federal district court judge released her under the supervision of U.S. Pretrial Services. A sentencing date has not yet been set.

Pugh, 69, of Baltimore, admitted to conspiracy to commit wire fraud, conspiracy to defraud the United States and two counts of tax evasion, according to the U.S. Attorney for the District of Maryland.

She was indicted on 11 charges: conspiracy to commit wire fraud, seven counts of wire fraud, conspiracy to defraud the United States and two counts of tax evasion from 2011 to 2017.

"Catherine Pugh betrayed the public trust for her personal gain," U.S. Attorney Robert K. Hur said in a statement. "Baltimore City faces many pressing issues, and we need dedication and integrity from our leaders—not corruption—in order to solve them. Law enforcement will continue to be vigilant for evidence of fraud and corruption, to ensure that our citizens receive the honesty and professionalism they deserve from government officials."

Prosecutors say Pugh faces up to 20 years in prison for the wire fraud conspiracy, five years for conspiracy to defraud the United States and five years for each of the two counts of tax evasion.

"Actual sentences for federal crimes are typically less than the maximum penalties," according to a statement from the U.S. Attorney's Office for the District of Maryland.

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Pugh was elected mayor of Baltimore in 2016.

Before that, she served as a member of the Maryland Senate from 2007 to 2016.

While a senator, she was on various committees, including the Senate Health Committee.

The charges against her stem from dealings around the children's book series that Pugh penned about a character named "Healthy Holly" to encourage kids to engage in healthy behaviors.

She released four books from 2011 to 2017, with titles such as "Healthy Holly: Exercise Is Fun" and "Healthy Holly: Vegetables are not just Green." She marketed the book almost exclusively to nonprofit organizations that had dealings with the government in Baltimore or state.

Pugh has arrived at federal court in downtown Baltimore, ahead of her arraignment hearing. More (w/ @lukebroadwater): https://t.co/c9MPSWuvbv pic.twitter.com/SfCM87LnqM
— Kevin Rector (@RectorSun) November 21, 2019

From November 2011 to March 2019, Pugh admitted that she and her legislative aide used different methods of trying to defraud these organizations, like taking payments and not delivering books; diverting books purchased to go to a third party to herself; and then re-selling the same books, according to prosecutors.

One of the organizations she admitted to swindling was the University of Maryland Medical System, of which she was on the board. It paid $300,000 for a total of three books that were to be distributed to students at Baltimore City Public Schools. Many of them she kept and attempted to resell.

Pugh admitted she used proceeds from the book sales to fund her mayoral campaign and to buy and renovate a house in Baltimore.

Two of Pugh's former associates already pleaded guilty in the case.

Gary Brown Jr., pleaded guilty to federal charges of conspiracy to commit wire fraud, tax evasion and filing a false tax return, officials said.

As part of their conspiracy to defraud the United States, prosecutors said Pugh issued Healthy Holly checks payable to Brown to fund straw donations. After he cashed the checks, he used the money for debit cards, personal checks and money orders, then deposited more than $62,000 into the Committee to Elect Catherine Pugh bank account, according to officials.

Brown was convicted of violating Maryland election laws in 2017 and afterward, Pugh admitted that instead of returning the $18,000 in illegitimate donations to straw donors, she directed him to pay for his legal defense in the case, which impacted her, prosecutors said.

Pugh resigned May 2 after she had been on leave since April 1. She cited pneumonia in stepping aside at a time when she was under scrutiny for netting more than half a million dollars in book deals from health-care companies that do business with the government.

Neither she nor Brown has a sentencing date set yet.