Former Baltimore Mayor Pleads Guilty To Fraud, Tax Evasion, Faces Decades In Prison

Former Baltimore Mayor Catherine Pugh pleaded guilty Thursday afternoon to federal charges in the "Healthy Holly" book scandal, reported WJZ Baltimore

Pugh pleaded guilty to four of the 11 charges, including wire fraud, conspiracy to defraud the US, and two counts of tax evasion. The disgraced mayor faces up to 35 years in federal prison, sentencing is expected in late February 2020.

Maryland US Attorney Robert K. Hur told reporters on the steps of the US District Court in Baltimore that "the city of Baltimore faces many pressing issues. We need dedication and professionalism from our leaders, not fraud and corruption, if we have any hope of fixing these problems."

Pugh's attorney Steven D. Silverman said her client "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." 

The indictment alleges Pugh used her position of power to defraud the customers of "Healthy Holly" children's book series for personal use and also to fund her mayoral campaign.

"The indictment alleges that from November 2011 until March 2019, Ms. Pugh conspired with Gary Brown to defraud purchasers of 'Healthy Holly' books to enrich themselves, promote Ms. Pugh's political career and fund her campaign for mayor," Hur said. "Mr. Brown helped Ms. Pugh solicit nonprofit organizations and foundations to buy the 'Healthy Holly' books."

The indictment said for years Pugh evaded paying taxes on the sales of the book. 

"For the tax year 2016, Ms. Pugh claimed her taxable income was a little over $31,000 and the tax due was a little over $4,000, when in fact her taxable income was over $322,000 with an income tax due of approximately over $100,000. In other words, her taxable income was more than 10 times what she reported to the IRS for that year and she owed more than 20 times more in taxes than she actually paid for that year," Hur said.

Pugh resigned in May after the FBI and IRS raided her home amid speculation, she was involved in large book sales to disguise hundreds of thousands of dollars in kickbacks from the University of Maryland Medical System and managed-care consortium KaiserPermanente. 

Fraud runs deep in Baltimore...