Ex-Baltimore mayor sentenced to 3 years in book sales scheme

Former Baltimore Mayor Catherine Pugh was sentenced to three years in prison, followed by three years probation, on Thursday after she was convicted in a lucrative, yearslong scheme that sold her self-published children’s books to nonprofits and foundations to promote her political career and fund her run for mayor.

Pugh, 69, pleaded guilty to federal conspiracy and tax evasion charges in November. The veteran Democratic politician was elected mayor in 2016 and resigned in May after authorities began investigating bulk sales of “Healthy Holly” books that netted her hundreds of thousands of dollars.

Pugh’s attorneys suggested a sentence of 366 days, while prosecutors asked for nearly five years.

U.S. District Judge Deborah K. Chasanow also ordered Pugh to pay more than $411,000 in restitution and forfeit nearly $670,000 in property.

U.S. Attorney for Maryland Robert Hur called the sentencing “a sad occasion” outside the courtroom afterward.

But, he added, “The type of fraud and public corruption that Ms. Pugh committed … undermines everyone’s faith in government. … This is a tragedy, and the last thing our city needs.”

Hur said that Pugh’s lawyer, in addressing the judge before the sentencing, asked who the victims were. Hur said the lawyer focused on corporate entities, but that “this crime has a lot of victims. And those victims are all of us — the people of the city of Baltimore.”

Alfred Watson, assistant special agent in charge of the Baltimore Division of the FBI, said Pugh “attempted to scam the city and the taxpayers, and that’s never acceptable under any circumstances.”

Outside the court, Pugh said, “I think the first thing I should do is apologize to the people of Baltimore, who put their faith and trust in me,” adding, “Nobody loves Baltimore as much as I do. …

“I know that Baltimore will move forward. I know we’ve got some great people out there. … And what I want the citizens of Baltimore to do is continue to believe in the future of our city.”

She added, “As my mother said, it’s not what you intend to do; it is what you do. And all of us pay the price for the things that don’t turn out the way they should.”

Pugh also said, “I will continue to listen and learn, and I don’t think this is the last chapter for Catherine Pugh.”

Hur added, “It’s very true that Ms. Pugh dedicated a significant part of her career to doing good things for the community and making life better for our citizens.”

But, over the last several years, he said, that good reputation “actually enabled her to commit the crimes and continue committing the crimes.”

‘Like something out of a mobster movie’

Prosecutors accused Pugh of double-selling the books, keeping many for self-promotion purposes and failing to deliver them to institutions they were purchased for, including the Baltimore City Public Schools.

Pugh used the proceeds to fund straw donations to her mayoral campaign and buy a new house, according to the sentencing memorandum filed by prosecutors.

Her actions “were like something out of a mobster movie,” prosecutors said in court.

Former Baltimore Mayor Catherine Pugh, center, and her attorney Steven Silverman, right, arrive for a sentencing hearing at U.S. District Court in Baltimore on Thursday, Feb. 27, 2020. Pugh pleaded guilty in 2019 to federal conspiracy and tax evasion charges. (AP Photo/Steve Ruark)

Pugh, with the assistance of longtime aide Gary Brown Jr., carefully carried out the scheme over more than seven years, starting from when she was a Maryland state senator and into her tenure as Baltimore’s mayor.

Her clients included the University of Maryland Medical System, health insurers and other organizations.

In a video submitted to the court and provided to The Baltimore Sun, Pugh said she “messed up,” that she accepts responsibility, and “I’m sorry.”

About 70 people submitted letters in support of Pugh, including former Baltimore Mayor Kurt Schmoke and U.S. Congressional candidate Kweisi Mfume, who is running for the late Rep. Elijah Cummings’ seat.

According to NBC Washington’s Scott MacFarlane, Mfume’s letter urged that Pugh be given “court-ordered supervision, voluntarily working with nonprofit, service [oriented] organizations that provide services and assistance to Baltimore’ poor and indigent communities.”

Mfume said he has known Pugh since 1975, when they were both college students, and added, “I don’t know personally if justice is … served by sending her to jail at age 70.”

Brown and another Pugh associate, Roslyn Wedington, await sentencing after pleading guilty to conspiracy and tax fraud.

A detailed accounting of the sales presented by prosecutors revealed that organizations paid Pugh $859,960 for orders of more than 132,100 copies. But, only about 73,200 copies were printed.

In their sentencing memorandum, prosecutors said Pugh’s personal inventory of books never exceeded 8,216 copies, but she resold them repeatedly through the elaborate scheme.

The University of Maryland Medical System, one of the state’s largest employers, was Pugh’s biggest book customer. The system paid her a total of $500,000 for 100,000 copies that were meant to be distributed to schoolchildren, but about 60,000 of those books were sent to a city warehouse and a Pugh office, where thousands were removed to give to other customers.

Prosecutors said Pugh never delivered the other 40,000 books the health system purchased for city schools.

While serving in the Maryland Senate, Pugh sat on a committee that funded the medical system. She also sat on the hospital network’s board from 2001 until the scandal erupted in March.

The former mayor returned the last $100,000 payment.

Other Pugh customers include CareFirst BlueCross BlueShield and Kaiser Permanente, which insure city employees. Some of their multiyear, multimillion-dollar contracts were awarded before Pugh took office, and some were awarded afterward, prosecutors said in a court filing.

“While there is no evidence that Pugh attempted to extort or solicit bribes from any of the foregoing companies or organizations, the fact that she repeatedly and almost exclusively targeted them suggests that Pugh leveraged the power of her elected office to corruptly solicit money from companies and organizations that might be beholden to her,” prosecutors wrote in their sentencing memorandum.

The memorandum added that none of those who bought the books were even aware of their existence until Pugh mentioned them.

Prosecutors said 93.6% of the book purchases, totaling $805,000, were bought by corporate buyers with an interest in “obtaining or maintaining a government contract.”

WTOP’s Kate Ryan and Rick Massimo contributed to this report.

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Consumer News | Local News | Maryland News

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