Baltimore City State’s Attorney Marilyn Mosby reiterated Friday an argument she’s made for nearly a year: the federal investigation that led to her indictment is part of a personal campaign against her, waged because of her actions as the city’s top prosecutor.
“I fought back against the same U.S. Attorney's office that is charging me now, when they warned me not to charge the police in the Freddie Gray case,” she said in a brief news conference. “I get it. This is not what prosecutors usually do. And many people will forever hate me for it because of my commitment to racial justice.”
A federal grand jury indicted Mosby Thursday on two counts of perjury tied to withdrawals from her city retirement savings in which she claimed financial hardship from the pandemic and two counts of making false statements on mortgage applications for the purchases of two Florida homes.
The indictment alleges the Democrat said twice in 2020 under penalty of perjury that her income was negatively impacted by the pandemic in order to withdraw money without penalty from a retirement account. That year, her salary was $248,000, a raise from the year before.
Prosecutors also say that Mosby put withdrawals toward two properties in Florida. She allegedly failed to disclose to two mortgage lenders unpaid back taxes and a lien on her home and told one lender that a property would serve as a second home in order to receive a lower interest rate, though she had already signed an agreement with a management company to rent the property.
“I intend to fight with every ounce of energy within my being, to prove my innocence and clear my name,” Mosby said.
She ended the news conference without taking questions, saying that her attorney A. Scott Bolden would answer them at a later date. Bolden decried the charges Friday on WYPR’s Midday, saying “there's personal, political and even racial animus that drives this investigation.”
He said that Mosby cleared the penalty-free withdrawals with her accountants. In other media appearances, he has said that Mosby did not know about a $45,000 tax lien the IRS filed against her — so she didn't purposefully lie when she omitted the tax liability from the mortgage applications.
He noted that Assistant U.S. Attorney Leo Wise, who is prosecuting the case, has donated to her political opponents.
“If you just want to go after this progressive Black woman prosecutor, then all you want is an indictment, because you're not interested in whether she's innocent or not,” he said.
Bolden said he has exculpatory evidence but did not elaborate on what that evidence is.
Michele Hallman, senior counsel and managing legal director at Taxology, LLC, said the relaxed CARES Act rules about penalty-free retirement withdrawals were clear cut.
“It has to be related in some way to the pandemic that you are feeling adverse consequences as a result of the coronavirus,” said the attorney, who is unaffiliated with the case. Tax professionals “have gotten multiple messages, loud and clear, that the IRS as well as the FCC are going after people who have engaged in fraud as a result of the coronavirus.”
That messaging has included warnings about withdrawals from the retirement plans, though mostly for plan administrators rather than individuals, she added.
Mosby and her husband, City Council President Nick Mosby, who was not named in the indictment, have been under federal investigation since at least February of last year, following a city report into the State’s Attorney’s travels. The feds subpoenaed a slew of their financial and tax records, including campaign finance documents and donations.
Hallman called Thursday’s indictments low-hanging fruit.
“I suspect that whatever information was uncovered while the DOJ has been looking through their finances hasn't turned up much, and they really hit pay dirt,” she said.
Still, she said, the alleged crimes have serious consequences. Lying on a mortgage form can carry a maximum of 15 years in prison, a sentencing guideline that was increased in the wake of the 2008 financial crisis.
“These penalties have been in place for almost a decade. This is something you don’t do; you just don't lie on a mortgage application,” Hallman said. “People who are visible should be really held as, prosecutors say, to a higher standard are engaging in this activity. I think that the administration, the DOJ, is sending a message that this kind of behavior is not going to be tolerated.”
Roger Hartley, the Dean of Public Policy at the University of Baltimore, said that an indictment against someone tasked with interpreting the law raises serious ethical questions.
“It's a responsibility to apply, implement and enforce our law,” he said. “And so the legal question is extremely important as to whether she will be able to stay in office.”
The case’s outcome will have huge implications: elected state officials can be removed if they are convicted of felonies.
“If there are allegations here, we do need to see where they go, especially if there's alleged evidence because it's an opportunity to preserve the public trust in government,” Hartley said. “On the other hand, bringing charges against an elected official cannot be done in a cavalier manner.”
Mosby is up for reelection this year. Her legal battles will almost certainly become a top issue in June’s highly competitive Democratic primary.
Hallman, of Taxology, predicted that if Mosby fights the charges, as she said she will, the case likely won’t be resolved until 2023.
