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Former Baltimore Mayor Catherine Pugh expected to plead guilty to perjury in state case

Catherine Pugh, the mayor of Baltimore who resigned upon the news of the "Healthy Holly" book scandal investigation, at the federal courthouse in Baltimore Thu., Feb. 27, 2020.
Catherine Pugh, the mayor of Baltimore who resigned upon the news of the "Healthy Holly" book scandal investigation, at the federal courthouse in Baltimore Thu., Feb. 27, 2020. (Karl Merton Ferron/Baltimore Sun/TNS)

Former Baltimore Mayor Catherine Pugh is expected to plead guilty to a misdemeanor charge of perjury in state court, the prosecutor says, before she departs later this month for federal prison in Alabama.

Maryland State Prosecutor Charlton Howard III said he expects Pugh, 70, to plead guilty at a hearing June 19 in Anne Arundel Circuit Court. Prosecutors charged her with perjury for willfully omitting her lucrative “Healthy Holly” children’s book business from the financial disclosure forms she filed as a state senator. The perjury charge carries a maximum of 10 years in state prison.

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Howard declined to discuss the terms of her plea deal. Pugh’s attorney, Andy White, also declined to comment on the terms.

She was charged with perjury in Anne Arundel Circuit Court because her alleged crime traces to the financial disclosures from her time serving as a state senator in Annapolis.

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Pugh’s federal prison term has been postponed pending the resolution of the state case. She’s scheduled to leave in two weeks for the Federal Correctional Institution, Aliceville, a women’s low-security prison about two hours west of Birmingham, Alabama.

Pugh’s downfall began last year when The Baltimore Sun revealed she had entered into a no-bid deal with the University of Maryland Medical System, where Pugh sat on the board of directors, to buy 100,000 copies of her sloppily self-published “Healthy Holly” books for $500,000. She later resigned from the board and from her position as mayor amid multiple investigations into her finances and the book sales. In total, she netted more than $850,000, federal prosecutors say.

At the same time, she failed to print thousands of copies, double-sold thousands more and took many others to use for self-promotion, according to prosecutors. Investigators also asserted that she laundered illegal campaign contributions and failed to pay taxes.

Pugh pleaded guilty in November 2019 to federal charges of conspiracy to commit wire fraud, conspiracy to defraud the U.S. government, and two counts of tax evasion. U.S. District Judge Deborah Chasanow sentenced Pugh to serve three years in federal prison. The judge also ordered Pugh to pay more than $400,000 in restitution and forfeit nearly $700,000.

Meanwhile, Gov. Larry Hogan asked the state prosecutor to conduct his own investigation, resulting in the perjury charge. State law requires members of the General Assembly to disclose their financial interests. Though Pugh disclosed her Pigtown consignment shop 2 Chic Boutique, she makes no mention of the “Healthy Holly” books.

In charging documents, prosecutors wrote that they investigated Pugh’s company Healthy Holly LLC and found that in 2012 she earned at least $108,000 in book sales, mostly to the University of Maryland Medical System. Then a state senator, her 2012 financial disclosure omits this money, the prosecutors wrote.

They found her earnings soared to $345,000 by 2016, but she again omitted Healthy Holly from financial disclosure forms filed with the state ethics commission. That year, the university hospital system paid her another $100,000 and health insurer Kaiser Permanente paid her $50,000.

The financial disclosures are required of all state employees and elected officials to ensure the business of the state is conducted with impartial and independent judgment. While a state senator, Pugh served on health and finance committees that took on the issues of health care facilities.

Each year, she signed ethics forms to swear her financial disclosures were accurate and complete. The prosecutors wrote that she knew well the disclosures were false and part of her scheme to deliberately hide her Healthy Holly money. Pugh served about a decade in the General Assembly before she was elected mayor in late 2016.

Pugh’s not the first elected official to allegedly conceal lucrative conflicts of interest. In 2012, then-Sen. Ulysses Currie was censured on the floor of the Senate for not reporting that he was paid nearly $250,000 by the Shoppers Food Warehouse grocery chain to represent it before state agencies. A federal jury acquitted him of corruption charges.

In 2010, Baltimore Mayor Sheila Dixon was forced from office as part of a plea agreement on a perjury charge that she failed to disclose gifts from a developer including fur coats on city ethics forms. The plea deal came after a jury convicted Dixon of a misdemeanor for stealing about $500 in gift cards intended for needy families.

The Baltimore Sun’s Justin Fenton contributed to this article.

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