Maryland District Court prosecutors recommended the maximum sentence of 57 months in the ‘Healthy Holly” tax–and wire fraud case of former Baltimore Mayor Catherine Pugh on Thursday.
According to the memo, Pugh used her political stature as Maryland senator and Mayor of Baltimore to push her self-authored, self-published Healthy Holly books as a facade to enrich herself, and fraudulently fund her mayoral election campaign and the renovation of her home.
She did so through a complicated scheme of straw donations, fake purchases, the multiple times reselling of the same copies without delivering them and a string of bookkeeping tricks and tax-evasion tactics.
Her Healthy Holly book series initiative served as a cornerstone in her seven years spanning money laundering and tax-evading scheme under the guise of promoting a healthier lifestyle among children and reducing obesity, according to Assistant U.S. Attorneys Martin J. Clarke and Leo J. Wise in a blistering 37-page sentencing memorandum.
Pugh did so “by specifically seeking out potential buyers who might benefit financially if Pugh was politically successful, thus corruptly leveraging her political title and government office,” the memo read.
“The chronology of events since 2011, comprising Pugh’s seven-year scheme to defraud, multiple years of tax evasion, election fraud, and attempted cover-ups, including brazen lies to the public, clearly establishes the deliberateness with which she pursued financial and political gain without a second thought about how it was harming the public’s trust,” attorneys wrote.
Pugh had also laundered a $20,000 cheque through her co-owned consignment store for her electoral campaign by a sponsor who had already reached the $6,000 donation limit.
While “Pugh’s conduct unquestionably added to the City’s problems,” prosecutors note, they argue that “the greatest harm is the damage done to the public’s trust and faith in its government,” and the biggest victim “is the citizens of Baltimore and the State of Maryland whose faith and trust in government has been breached.”
Pugh’s attorneys said in a response that they “strongly disagree” with the prosecutors’ 57-months maximum punishment recommendation, adding, “Our position as to a fair and appropriate sentence will be laid out in a sentencing memorandum which will be made public pending order of court,” WJZ reported. Pugh’s trial date is set for February 23.
Pugh pleaded guilty to several federal charges, including conspiracy to commit wire fraud, conspiracy to defraud the federal government, and two counts of tax evasion on November 21 last year.
Authorities accused Pugh of allegedly participating in a scheme involving sales of “Healthy Holly,” her children’s book series.
Sales of the “Healthy Holly” book went to a charity where Pugh served on the board, said federal prosecutors, who also alleged that she disguised the proceeds as donations to her reelection campaign. They also said she used the money to help buy and renovate a home, according to a news release from the Department of Justice.
Pugh resigned earlier last year after public pressure mounted following reports published about the scandal.
“The indictment alleges, for the tax year 2016, Ms. Pugh claimed her taxable income was a little over $31,000, and the tax due was a little over $4,000, when in fact her taxable income was over $322,000 with an income tax due of approximately over $100,000. In other words, her taxable income was more than ten times what she reported to the IRS for that year, and she owed more than 20 times more in taxes than she actually paid for that year,” Hur said, reported WBAL.
Epoch Times reporter Jack Phillips contributed to this report
