Former Baltimore mayor Catherine E. Pugh (D) was sentenced Thursday to three years in federal prison after pleading guilty to charges of fraud and tax evasion.
“Holding public office is a rare privilege: An opportunity to serve our community, and get things done that help our community,” said U.S. Attorney for the District of Maryland Robert K. Hur. “And unfortunately the type of fraud and public corruption that Ms. Pugh committed … undermines everyone’s faith in government and what government can do for the people.”
Pugh was indicted in November on charges of tax evasion, conspiracy to commit wire fraud and conspiracy to defraud the United States relating to several of her business ventures, notably the Healthy Holly children’s book series.
She entered a guilty plea for four of the 11 counts against her shortly thereafter.
Pugh’s sentence further stipulates that she pay $411,948 in restitution to the University of Maryland Medical Center and the Maryland Auto Insurance Fund, as well as the forfeiture of $669,688 to the government, which includes her home and some remaining capital from her election fund.
She will be on three years of supervised release upon her parole. When asked after the hearing if she plans to appeal her sentence, a lawyer for Pugh responded “no.”
U.S. District Judge Deborah K. Chasanow said during her sentencing that Pugh’s punishment needed to reflect the seriousness of her crime, and that while the impact on Pugh has been demonstrable, “the impact on the city is also very great and very tragic.”
A full house gathered in the courtroom of the U.S. District Court in wait for Pugh, who presented in a white dress and sent little waves of her hand to supporters from the seat between her defense counsel, who, throughout the hearing, consoled her with pats on the back.
Pugh expressed remorse in court and asked for leniency in her sentencing.
Through sniffles, she apologized to the city and state, as well as to her supporters, and said she came to take full responsibility for her actions.
Pugh served as mayor from December 2016 before resigning in May 2019. She also spent a decade in the state Senate, 18 months in the House of Delegates, and four years on the Baltimore City Council.
“While I’ve done some good things, they will be overshadowed by the wrong I’ve done,” Pugh said.
“No one is more disappointed than me.”
Attorneys for Pugh requested a sentence of a mere one year and one day, which would allow for a lesser sentence for good behavior.
Prosecuting attorneys sought a 57-month sentence, calling Pugh’s fraud “remarkable in both its scope and duration” in their sentencing memorandum.
According to the court document, Pugh’s fraudulent scheme had many moving parts.
Starting in 2011, she began double-selling books from her Healthy Holly series previously purchased by non-profit entities that had governmental dealings and, in some cases, took payments for books that went undelivered. Pugh also resold books donated to the Baltimore City Public School system by the University of Maryland Medical System.
Over the years, that fraudulent effort netted a profit to the tune of hundreds of thousands of dollars.
During the sentencing hearing, Assistant U.S. Attorney Martin J. Clarke said that the former mayor specifically targeted government-minded entities as her main purchasers, noting that 93.6% of the Healthy Holly series was purchased by those parties and that she received 80% to 100% of the profit on each book sold.
Pugh was also taking books from city public schools to hand out as free gifts at public events and along the campaign trail.
Clarke showed a one-minute video of a March 2017 news conference Pugh delivered at the end of a citywide book donation drive.
The video showed large, yellow trashcans stuffed to the brim with books, each of which had multiple copies of at least one of the four books from her series stuffed in at the top.
Clarke stated that in the 18 months following that news conference, Pugh made another $100,000 in fraudulent sales.
A 13-minute apology video submitted by Pugh’s defense team and reported on by The Baltimore Sun the afternoon before her sentencing was mentioned at the hearing, but was not played.
The federal government made several other arguments as to why Pugh should serve a nearly five-year sentence, many of which surrounded her decisions to perpetuate fraudulent acts while on the state and city government dime, several years worth of tax evasion, her attempt to influence a mayoral election and the dealings of both Pugh and her former legislative assistant, Gary Brown Jr., which Clarke described as “something right out of a mobster movie.”
Over the years, Brown aided Pugh in the laundering of money, depositing straw donations into her mayoral campaign fund using untraceable cash for which Pugh had cut him checks, among other financial crimes.
In 2016, Pugh supported Brown’s nomination to fill a General Assembly seat left open after her victory in the city’s mayoral election. After Brown was indicted in early 2017 for election law violations committed in aid of her campaign, Gov. Lawrence J. Hogan Jr. (R) rescinded the nomination.
Clarke said that Pugh’s assistant was not the mastermind behind her scandals. “He was really just Ms. Pugh’s minion,” he said of Brown, who pleaded guilty to related charges last year.
Judge: Letters of support ‘ironic’
A recurring theme throughout the sentencing hearing was Pugh’s past rooted in altruism.
Defense attorney Steven D. Silverman retold Pugh’s biography, citing her humble upbringing, various academic positions, acts of community service and eventual rise to public office.
The defense counsel had five Pugh supporters testify before the judge asking for her leniency, including her former high school teacher, Missouri state Sen. Karla May (D), and University of Baltimore President and former Baltimore mayor Kurt L. Schmoke, all of whom spoke of her endeavors for public good. The defense team also read from a letter submitted by former Maryland Institute and College of Art president Fred Lazarus IV.
Numerous letters of support from community leaders were filed in the court in the weeks leading up to Pugh’s sentencing hearing.
Clarke said the letters reflect “dissonance” between the person Pugh purports to be in front of her supporters and who she has been in the recent past.
Chasanow called it “ironic” that everyone lauded Pugh’s history of public service, saying that’s what enabled her to perpetrate these crimes. The judge said she was astonished by the letters.
Silverman said that his client had accepted her responsibility, and had shown so in her actions following the media reports of the Healthy Holly scandal last April, noting that Pugh refunded UMMC’s laundered money within a week and finalized her plea before the indictment was unsealed.
Silverman implored the judge to consider Pugh’s background, but also the crime’s lack of violence and malicious intent, her age (she turns 70 next month) and the notion that she has already suffered “intense and unprecedented public shaming” over the past year, which he said was exacerbated because of her status as a public figure.
“She deserved it,” he said. “She earned it. But it also broke her. It absolutely broke her.”
“All anyone is going to remember from this story is Catherine Pugh was convicted; Catherine Pugh went to prison; and Catherine Pugh came out homeless and penniless,” Silverman added.