Former Baltimore Mayor Catherine Pugh was sentenced to three years in prison on Thursday, capping off a self-dealing scandal that was first brought to light in March of last year.
The Democrat, who turns 70 next week, confirmed that the fraudulent selling of her self-published “Healthy Holly” children's books amounted to a federal charges last year, when she pleaded guilty to conspiracy to commit wire fraud, conspiracy to defraud the United States and two counts of tax evasion.
U.S. District Court Judge Deborah K. Chasanow called Pugh's crimes "astounding."
"I have yet frankly to hear any explanation that makes sense," the judge said of Pugh's actions. "This was not a tiny mistake, lapse of judgment. This became a very large fraud. The nature and circumstances of this offense clearly, I think, are extremely, extremely serious."
This was not a tiny mistake, lapse of judgment. This became a very large fraud. The nature and circumstances of this offense clearly, I think, are extremely, extremely serious.
The former legislator held office throughout Maryland, including as a city council member and state senator, for around two decades. The mayorship was her dream job, Pugh said before the judge.
She apologized to the citizens of Baltimore and "anyone I have offended or hurt through my actions" and maintained that she had not started Healthy Holly LLC with intent to defraud but instead had "turned a blind eye" and "sanctioned things I should not have."
Outside the courtroom after the sentencing, Pugh said she accepted her sentence and that she was looking forward to rebuilding the rest of her life.
"This is not the last you'll see of Catherine Pugh," she said.
There is no set date for sentencing but Judge Chasanow noted April 13 is the latest Pugh could report to prison.
Pugh will also have to pay restitution of $400,000 to the University of Maryland Medical System and about $12,000 to the Maryland Auto Insurance Fund, two Healthy Holly buyers. She will also have to forfeit just under $670,000, including her Ashburton home and the remaining cash in her campaign account.
Pugh’s attorneys had asked for sentence of one year and one day, while the government asked for 5 years.
Pugh's defense team argued Pugh's status as a first-time offender, old age and public humiliation suffered over the last 11 months shoudl lead to a lighter sentence.
"Ms. Pugh is paying a tremendously heavy price for her crimes," her defense team wrote in a recent sentencing memo. "Her actions have caused significant pain, embarrassment, and shame for her and her family ... she is now too ashamed to spend any time in the community that she loves."
Attorney Steve Silverman walked the court through Pugh's extensive background as an educator, journalist and public servant, and touted accomplishments such as starting the Baltimore Design School and Baltimore Marathan and removing Confederate-era monuments throughout the city.
Silverman also argued that Pugh resigned as mayor instead of sitting on the seat to potentially bargain it during prosecution. "I cannot fathom a more responsible path," he said.
Silverman added that the last year has rendered Pugh "homeless and penniless." He said that Pugh fell into a culture of corruption on the UMMS board; about a third of its board has done business with the hospital system in some form.
Around 75 people submitted letters of support for Pugh to Judge Chasanow, including Kweisi Mfume, who recently won the Democratic special primary in the race to replace the late Rep. Elijah Cummings, Dr. David Wilson, president of Morgan State University, and Former Mayor Kurt Schmoke.
Schmoke and four others, including Pugh's high school teacher, stood before the judge and described their positive relationships with Pugh on Thursday.
Prosecutors argued that Pugh capitalized off of the image her character witnesses talked about. There are two Pughs, Asst. U.S. Attorney Martin Clarke argued: the Pugh who Baltimoreans chose to lead their city after the 2015 unrest with a reputation for public service, and the Pugh who privately capitalized off of that image and "deliberately and cunningly set out to deceive people."
Her crimes are "shocking," he said, like something "right out of a mobster movie."
Clarke argued that Pugh's public service in a variety of offices should not lead to a lesser sentence but bolster it. Her failure to uphold trust and integrity, despite taking multiple oaths on the Maryland Constitution, was heinous, he said.
Judge Chasanow cited with this argument in her decision.
"I disagree that the length of the sentence has no impact on others out there who might be thinking about using or abusing their positions of trust," Chasanow said, adding that the length of Pugh's sentence may serve as a deterrent for other elected officials.
And though Pugh’s attorneys argued the impact the enormously difficult past year or so for her should be taken into consideration, Judge Chasanow said she also had to consider the impact this had on the city.
"This couldn’t have happened at a worse time," she said.
After the judge delivered Pugh's sentence, the former mayor looked stunned. Supporters gathered around to console her on the court floor after proceedings had been dismissed.
Public controversy swirled shortly after the Baltimore Sun revealed Pugh’s self-dealing last year. State and local officials alike called on Pugh to immediately resign; the politician instead went on a medical leave, citing pneumonia, for a month. She resigned in May, leaving then-City Council President Jack Young to step into her shoes.
Prosecutors argued that Pugh 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 – as far back as 2011, both as a state senator and then as mayor.
Pugh struck up a deal with UMMS, where she sat on the board of directors, to buy 100,000 copies of her books for $500,000. Prosecutors say she netted more than $850,000 total.
The former mayor failed to print thousands of copies of her books and double-sold thousands of others. Prosecutors say she then used that cash to advance her political career, buy a second home and funnel straw donations to her mayoral campaign. All the while, she evaded taxes.
The self-dealing was “lengthy and extensive,” the U.S. Attorney for the District of Maryland Robert K. Hur said in November, after Pugh pleaded guilty.
The federal charges “demonstrate just how complex and sophisticated the fraud schemes were in which she engaged over the course of years,” Hur said. "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.”
