Friday, October 30, 2020

Former Baltimore mayor, Pugh indicted on wire fraud and tax evasion charges


Catherine Pugh, the former mayor of Baltimore who resigned in May amid a book deal scandal, was indicted on charges related to tax evasion and wire fraud, the US Attorney’s Office in Baltimore announced Wednesday.

A grand jury indicted Pugh, a Democrat, on the conspiracy to commit wire fraud, seven counts of wire fraud, conspiracy to defraud the United States and two counts of tax evasion in a newly-unsealed indictment.

The charges are the latest development in a scandal over a no-bid book deal steered to the University of Maryland Medical Center that led to the former mayor’s resignation in early May after the Baltimore City Council called for her ousting. It comes nearly seven months after federal authorities executed search warrants at several locations tied to Pugh, including her home as part of their investigation into whether she improperly profited from the deal while serving on the hospital’s board.

According to a statement from the US Attorney’s Office, Pugh marketed and sold her line of Healthy Holly books “to non-profit organizations and foundations, many of whom did business or attempted to do business with the Maryland and Baltimore City governments.”

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“The people of Maryland expect elected officials to make decisions based on the public’s best interests, not to abuse their office for personal gain,” Jennifer Boone, the special agent in charge, said in the statement. “Catherine Pugh betrayed the public’s trust.”

If convicted, the US Attorney’s Office says Pugh faces a maximum sentence of 20 years in federal prison for the wire fraud conspiracy and for each of the seven counts of wire fraud; five years in federal prison for conspiracy to defraud the United States; and five years in federal prison for each of the two counts of tax evasion.

At a press conference later Wednesday, Robert Hur, the US attorney for the District of Maryland, echoed Boone’s sentiments, telling reporters that Pugh’s actions “indicate a betrayal of the public trust.” Pugh’s victims, Hur said, are “the taxpayers and the people of Baltimore who expect and deserve integrity from their public officials.”

CNN has reached out to Pugh’s attorney for comment.

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Last spring, CNN reported that UMMS spent $500,000 to fund the purchase of some 100,000 books from Pugh’s company, Healthy Holly LLC. The former mayor also received about $114,000 from health care provider Kaiser Permanente for some 20,000 books from 2015 to 2018 and an additional $80,000 from the public foundation Associated Black Charities, which said it bought some 10,000 copies of Pugh’s between 2011 and 2016.

Pugh, who was elected mayor in 2016, apologized in March for doing something to “upset the people.” She also returned $100,000 to the medical system, canceled her book deal and resigned from the hospital’s board.

Source: CNN


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