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Pugh Charged With Perjury for Failing to Disclose Healthy Holly Interests

Former Baltimore mayor Catherine E. Pugh (D) during an appearance in Annapolis earlier this year. Photo by Bruce DePuyt

Ex-Baltimore mayor Catherine E. Pugh faces additional criminal charges ― this time in state court.

The Maryland Office of the State Prosecutor has charged Pugh with one count of perjury on legislative financial disclosure forms for failing to list her business interest in Healthy Holly LLC, the book company through which Pugh’s self-dealing scandal resulted in federal criminal charges and her political demise.

The seven-page criminal information was filed Wednesday in Anne Arundel County Circuit Court.

The complaint alleges that Pugh, while a state senator for the 40th District in Baltimore, did not disclose that she earned at least $345,000 in income in 2016 through sales of Healthy Holly books and also failed to disclose her ownership of Healthy Holly LLC.

An initial appearance on the charge is scheduled for Jan. 13, according to court records.

The state charge is separate from an indictment in federal court. Pugh pleaded guilty to four charges ― for tax evasion and conspiracy to commit wire fraud and defraud the U.S. government by reporting campaign donations as business expenses ― in U.S. District Court last month and is expected to be sentenced in late February. She likely faces about five years in prison under federal sentencing guidelines, according to federal prosecutors.

The state charge is a misdemeanor with a maximum penalty of 10 years in prison.

“Transparency from our elected officials is an essential aspect of protecting Maryland residents from corruption and political malfeasance,” Maryland State Prosecutor Charlton Howard said in a statement Wednesday. “Our office is committed to ensuring that those who abuse positions of trust in our state and local governments are held accountable.”

According to the state complaint, Pugh did not report her ownership of Healthy Holly in state financial disclosures for several years after she incorporated Healthy Holly LLC in January 2011.

In 2012, Pugh failed to disclose her interest in Healthy Holly, though prosecutors say she earned at least $108,000 in income from book sales, including $7,500 from the Maryland Automobile Insurance Fund, $500 from Riverside Health of Maryland, and $100,000 from the University of Maryland Medical System, where Pugh was a board member.

In 2013, Healthy Holly LLC earned at least $8,128 in income through the book sales including $4,448 from the Maryland Automobile Insurance Fund, which was passed through the Associated Black Charities, according to prosecutors. The earnings and business interest were not disclosed. Pugh also failed to disclose an interest in 2 Chic Boutique, which Pugh owns with city Comptroller Joan M. Pratt (D).

In 2014, Pugh failed to disclose at least $6,500 in income from CareFirst Blue Cross Blue Shield for book sales, according to the complaint.

In 2015, Healthy Holly LLC earned at least $100,000 in book sales from the University of Maryland Medical System that was not disclosed, according to prosecutors.

The criminal charge centers on failed disclosures from 2016, when Healthy Holly LLC earned at least $345,000 in book sales, including $100,000 from the University Maryland Medical System and $50,000 from Kaiser Permanente.

Federal court records alleged that Healthy Holly books were sold multiple times ― including tens of thousands that were never printed ― to organizations and businesses with financial ties to state or city government.

On the tax evasion charges that Pugh pleaded guilty to, federal prosecutors say Pugh reported taxable income in 2015 and 2016 that was far lower than money she brought in through Healthy Holly sales ― and less than her salary as a state senator.

In 2015, Pugh reported taxable income of $39,001; her actual taxable income for the year was about $76,175, according to the indictment.

In 2016, Pugh reported taxable income of $31,020, while prosecutors say the true figure was approximately $322,365.

In 2015 and 2016, Pugh was paid $45,207 and $46,915 as a state senator, respectively.

The tax loss to the government was about $117,384 in the two years, according to the federal indictment.

Pugh was elected mayor in 2016 and resigned this May as the scandal around her intensified.

Pugh’s attorney could not be immediately reached for comment on Wednesday.

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Pugh Charged With Perjury for Failing to Disclose Healthy Holly Interests