Former Baltimore mayor Catherine E. Pugh charged with wire fraud, tax evasion - The Washington Post

Baltimore’s former mayor Catherine E. Pugh has been indicted by a federal grand jury on wire fraud and tax evasion over lucrative book deals for her self-published Healthy Holly children’s series, according to the U.S. Attorney’s Office in Maryland.

Pugh resigned in May after revelations about the deals she allegedly cut with companies connected to the city and state government, setting off another political crisis and setback for the city.

Pugh, 69, was the second Baltimore mayor to leave office in the past decade while facing corruption allegations. The indictment accuses her of a years-long scheme dating to 2007.

Maryland U.S. Attorney Robert K. Hur, along with top officials from the FBI and IRS, are scheduled to address the charges unsealed Wednesday at a morning briefing. The charges come after searches in April of Baltimore City Hall, Pugh’s homes and of a nonprofit tied to her.

Federal agents soughtfinancial documents and other information related to almost $800,000 she allegedly was paid for the books, an enormous amount in the world of children’s literature. Pugh is expected to surrender to U.S. Marshals before a court appearance Thursday, prosecutors said.

Two former Baltimore employees, Gary Brown Jr, 38, and Roslyn Wedington, 50, have pleaded guilty to conspiracy to defraud the U.S. and to filing false tax returns, prosecutors said in a statement.

“The people of Maryland expect elected officials to make decisions based o the public’s best interests, not to abuse their office for personal gain,” Jennifer Boone, the special agent in charge of Baltimore’s FBI field office said in a statement.

[Baltimore Mayor Catherine Pugh resigns amid book scandal]

Pugh, a former state lawmaker for a decade and rising political star, was elected mayor in 2016. Her downfall stunned friends and supporters, and was another blow to the city struggling with ongoing violence and scarred by 2015 riots after the death of Freddie Gray from an injury in police custody.

Last week, the city recorded its 300th homicide for the fifth consecutive year. The grim numbers threaten to once again leave Baltimore with the highest or near the highest homicide rate in the country.

[Read the indictment here]

State and federal investigators began scrutinizing payments to Pugh from entities including the University of Maryland Medical System for the Healthy Holly book series, which follows an African American girl, Holly, and is aimed at promoting a healthy lifestyle.

In March, the Baltimore Sun first reported that Pugh received $500,000 for a total of 100,000 books starting in 2011, when she served on a state Senate committee that partially funded the private hospital network — and on its board. Pugh resigned from the board, on which she had served for 18 years. She returned $100,000 for a shipment of books she said was not completed.

The Sun also reported that Kaiser Permanente paid Pugh more than $100,000 for the book at the same time it was seeking a $48 million contract from a city board controlled by the mayor.

[Federal agents search Baltimore City Hall and Mayor Catherine Pugh’s homes]

Pugh was hospitalized with pneumonia for five days in late March and took an indefinite leave April 1. She never returned to her job at City Hall.

Longtime City Council president Bernard C. “Jack” Young was elevated to acting mayor when Pugh took a leave of absence, and has served as mayor since her resignation. Young plans to run for mayor in the 2020 election.

In addition to Pugh’s homes and office, agents searched the apartment of Gary Brown Jr., a former top aide to Pugh. Brown and Pugh have ties to the nonprofit Maryland Center for Adult Training, which was also searched in the spring.

Pugh previously led the center’s board of directors and Brown was listed in a tax filing as the program’s executive director in the fiscal year that ended June 2017. The workforce training program received city contracts during Pugh’s tenure as mayor, according to the Sun.

Even before the criminal charge became public, revelations about the medical system contracts for board members prompted the General Assembly to take action. State lawmakers ordered an audit of the medical system, with a report due to lawmakers by Dec. 15.

But the auditors last month requested an extension to March 13, 2020, saying UMMS had “delayed or hindered our work by repeatedly failing to make employees available and failing to provide request information on a timely basis .” The extension was approved Nov. 7 by Senate President Thomas V. Mike Miller Jr. (D-Calvert) and House Speaker Adrienne Jones (D-Baltimore County).

In a statement, the system said the audit had required “countless labor hours and the production of many thousands of documents on the part of UMMS.” Auditors have been onsite for six months and “we have always endeavored to work collaboratively and transparently with them,” according to the statement from John Ashworth, Interim President and CEO, University of Maryland Medical System.

Rachel Chason contributed to this report

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