Current News

/

ArcaMax

US prosecutors seek nearly 5-year sentence for former Baltimore mayor

Justin Fenton, The Baltimore Sun on

Published in News & Features

BALTIMORE -- Federal prosecutors told a judge that former Baltimore Mayor Catherine Pugh should receive nearly five years in prison for conspiracy and tax evasion.

Pugh is scheduled to be sentenced Feb. 27.

"The facts establish that Pugh deliberately engaged in a broad range of criminal acts while serving as Maryland state senator and mayor of Baltimore City," prosecutors wrote in a sentencing memorandum filed Thursday in U.S. District Court in Baltimore.

With the assistance of a longtime legislative aide, they wrote, Pugh "methodically expanded her illegal scheme and managed to conceal it from state and federal authorities and, most important, the citizens she served."

The counts include the sweeping allegations against Pugh in the initial indictment -- that she knowingly sought to defraud purchasers of her "Healthy Holly" children's books, reap financial and political benefits, and pay little or no taxes on the windfall.

Steven Silverman, one of Pugh's attorneys, said his team had filed its own sentencing memorandum, which would "speak for itself." The filing was not immediately available through the court, but Silverman said a redacted copy was forthcoming.

Under a plea deal, prosecutors will not pursue seven counts of wire fraud against Pugh.

The statement of facts described how Pugh defrauded area businesses and nonprofit organizations out of nearly $800,000 through sales of the books to unlawfully enrich herself, promote her political career and illegally fund her campaign for mayor.

Prosecutors also said Pugh had not disclosed her financial interests while in the state Senate before becoming mayor, as required by Maryland law. After The Baltimore Sun reported in March that Pugh did not disclose her $500,000 business relationship with the University of Maryland Medical System, the Democratic mayor submitted an amendment for seven years of reports filed with the state ethics commission.

She resigned from office in May.

Included in the sentencing memorandum is a scene from an April raid on her home. FBI agents came to seize, among other items, her personal cellphone. Prosecutors say Pugh handed over a red, city-issued iPhone, but investigators said they wanted her personal phone, a Samsung. She told them she had left it with her sister in Philadelphia.

An agent then called the Samsung phone.

 

"Almost immediately, the agents heard a vibrating noise emanating from her bed. Pugh became emotional, went to the bed and began frantically searching through the blankets at the head of the bed. As she did so, agents starting yelling for her to stop and show her hands," prosecutors wrote.

Pugh had grabbed the phone from underneath her pillow, and the agents took it from her.

"Pugh's lie and futile attempt to silence the phone to prevent its seizure is indicative of her lack of respect for the law and, more broadly, her past efforts to hide longstanding criminal misconduct," prosecutors wrote.

The document outlines how Pugh illegally solicited a campaign contribution from a city contractor, J.P. Grant, which was laundered through a consignment shop she owned with City Comptroller Joan Pratt. Prosecutors said Grant wrote out a $20,000 check to Pugh, which he had his wife sign in the hope that doing so would draw less attention than signing it himself, and Pugh deposited it into the shop's bank account.

Pugh used the money to make illegal straw donations to her campaign, and used the balance to cover business expenses for the 2 Chic Boutique, prosecutors say. In turn, authorities say, 2 Chic filed a false tax return that made no mention of receiving such funds.

"The deposit was by far the largest in the small company's history, and the company would have only survived a few more months without the benefit of that deposit," prosecutors said. "In short, Pugh and her partners reported the expenses paid with the $20,000 deposit because it lowered their tax liability, but chose not to report the receipt of the $20,000 because it would have increased their tax liability."

(The Baltimore Sun's Kevin Rector contributed to this article.)

(c)2020 The Baltimore Sun

Visit The Baltimore Sun at www.baltimoresun.com

Distributed by Tribune Content Agency, LLC.

 

Comments

blog comments powered by Disqus