Former Baltimore Mayor Catherine Pugh pleaded guilty Thursday to federal charges related to the sales of her Healthy Holly children’s books.
She entered guilty pleas in federal court in Baltimore to conspiracy to commit wire fraud, conspiracy to defraud the United States, and two counts of tax evasion.
During a scheduled arraignment, Pugh appeared publicly for the first time since a news conference in March the day after she was released from Johns Hopkins Hospital after being treated for pneumonia.
She appeared before U.S. District Judge Deborah K. Chasanow to plead guilty and confirm that the fraudulent selling of her self-published children's books amounted to a federal charges.
She had been charged with a count of conspiracy to commit wire fraud, seven counts of wire fraud, conspiracy to defraud the United States and two counts of tax evasion.
The indictment, handed up Nov. 14 and unsealed Wednesday, was announced by the U.S. Attorney for the District of Maryland Robert K. Hur, the Federal Bureau of Investigations and the Internal Revenue Service.
"The facts to which Ms. Pugh admitted in federal court just a few minutes ago were lengthy and extensive," Hur said outside the courthouse. "They demonstrate just how complex and sophisticated the fraud schemes were in which she engaged over the course of years."
Prosecutors say that for years, Pugh, as a state senator and then as mayor, wheedled companies with that wanted to do business with or get grants from the state and city to purchase her Healthy Holly books -- like the University of Maryland Medical System and Associated Black Charities. The former was assisted by longtime aide Gary Brown Jr., who pleaded guilty to wire fraud conspiracy of his own.
Pugh used Healthy Holly cash to advance her political career, buy a second home and funnel straw donations to her mayoral campaign. All the while, she evaded taxes by hiding cash from the IRS.
"This was not conduct that spanned weeks or months or even one year that spanned a number of years, dating back all the way to 2011," Hur said.
The evidence his team collected was stark: it included fake IRS forms and phony invoices that made it appear that Brown's business was doing business with Pugh's.
Pugh was charged with 11 counts in an indictment unsealed on Wednesday. A plea agreement submitted by the federal government allowed her to plead guilty to just four of them; Pugh signed the deal on Tuesday. It’s likely the seven remaining charges of wire fraud will be dismissed.
The disgraced former mayor wiped away tears as yesterday’s hearing wrapped up. When she and her lawyers left the courthouse, they declined to comment. Instead, she got into a black SUV and pulled away.
Hur, who said yesterday the investigation took three years, says prosecutors have approached Judge Chasanow with recommended time behind bars.
"Approximately five years," he said, though "that is not binding on the judge at all."
Prosecutors are also seeking to seize about $800,000 from Pugh, plus her Ashburton home.
The former mayor has agreed to pay what she owes the IRS for 2013 through 2017. She’ll also have to work with the agency on a thorough assessment of her assets. Pugh surrendered her passport to the court and will remain free until her sentencing. That’s scheduled for February 27th.
