McGrath faces federal fraud, embezzlement trial Monday

A former chief of staff to former Gov. Larry Hogan (R) heads to federal court in Baltimore on Monday to face fraud and embezzlement charges.

Roy McGrath joined Hogan’s team initially as deputy chief of staff. He also served as the liaison to the Board of Public works.

By December 2016, McGrath left the governor’s office to become the CEO and chair of the quasi-public Maryland Environmental Service.

Four years later McGrath returned to the State House, tapped by Hogan in May 2020 as his chief of staff.

A few months later, reports surfaced about the terms of his departure from the Maryland Environmental Service, including a payout equal to 12 months salary.

McGrath resigned from the post on Aug. 17, 2020 — about a week after news of his severance package became public.

The departure triggered a series of legislative hearings as well as a slew of federal and state criminal charges.

Federal fraud and embezzlement charges

McGrath was charged in an initial eight-count federal indictment with wire fraud and improperly securing a $233,648 severance payment from the Maryland Environmental Service just as he was joining Hogan’s staff. The payment is equal to his annual salary as head of the agency.

Other charges include fraud and embezzlement related to tens of thousands of dollars in expenses as well as a failure to claim vacation time while in Florida and a Mediterranean cruise to Spain, France and Italy. Those trips involved his wife, Laura Bruner, who at the time was his girlfriend.

While prosecutors sought to introduce as evidence photos and text messages between McGrath’s wife and her father, that request was denied by U.S. District Court Judge Deborah L. Boardman during pre-trial hearings.

After the initial federal indictment, prosecutors later added a charge alleging McGrath falsified records. The document in question allegedly showed Hogan was informed and approved of the payout to McGrath.

Hogan has vigorously and repeatedly denied he approved of the payment.

McGrath faces up to 20 years in prison for each of the wire fraud charges. He could also face an additional sentence of up to 10 years for each of two embezzlement counts.

A potential star witness for the prosecution

Hogan, the former governor, could be called as a witness for the prosecution. The former governor’s appearance was hinted at in an initial draft of jury questions.

Hogan’s testimony may be key in rebutting both McGrath’s claims that the governor knew of and approved of his severance package from the Maryland Environmental Service as well as the memo prosecutors allege McGrath fabricated.

Should Hogan be called to testify, it would mark a rare if not unique occasion in which a former or current governor was called as a witness for the prosecution in a federal trial.

Another trial to come

The federal trial is the first of two involving McGrath.

The Office of the Maryland State Prosecutor, working in tandem with federal prosecutors, filed 27 charges against McGrath in Anne Arundel County Circuit Court in October 2021.

Included in those charges are nine counts of unlawful recording of phone calls. The recordings include conversations with Hogan and other members of the governor’s staff between March 11 and Aug. 17, 2020, according to prosecutors. There are also nine counts of misconduct in office related to the calls.

McGrath and his attorney have sought to use the recordings in federal court, where the law allows for one-party consent.

McGrath faces up to five years in state prison and $10,000 for each of the wiretap charges. The misconduct charges carry a penalty of anything that is not considered cruel and unusual.

Additionally, he faces charges related to falsifying timesheets for the Florida and Mediterranean trips as well as for payments made on his behalf to the Harvard University Kennedy School and a $15,000 payment to a charity on his behalf. Those charges also include related misconduct in office charges.

That case is scheduled to go to trial in July.

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