An Anne Arundel County judge sentenced former Baltimore Mayor Catherine Pugh Friday to six months in prison for lying on financial disclosures forms to hide her lucrative “Healthy Holly” children’s book business.
Under a plea deal reached in December, the court will count those six months concurrent with a separate, three-year prison sentence Pugh received for her federal fraud and conspiracy conviction. Pugh, 70, is scheduled to report to federal prison in Alabama next Friday.
Anne Arundel Circuit Judge Mark W. Crooks told Pugh he was saddened by her downfall.
“What I think that leads to is an erosion of trust in our public officials,” he told her. “We see it all the way from the White House on down.”
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Pugh Statement of Facts (PDF)
Pugh Statement of Facts (Text)
State prosecutors had charged Pugh with one count of misdemeanor perjury, finding she failed to disclose hundreds of thousands of dollars made off her “Healthy Holly” children’s books. She pleaded guilty to the charge Friday.
“Are you pleading guilty because you are in fact guilty?” her attorney asked her.
“Yes,” she replied, softly.
Pugh did not address the court during the routine, half-hour plea hearing. She answered the judge’s questions with “yes” or “no.”
“I felt you were a bright light in the city, a city quite frankly I adore,” the judge said.
“You were forced to leave the helm in Baltimore’s hour of need,” he added, noting the rampant gun violence that continues to grip Baltimore.
The perjury charge carried a maximum penalty of 10 years in prison, but Pugh’s attorneys and state prosecutors agreed on a sentence of six months. She was prosecuted in Anne Arundel Circuit Court because her crime traces to the financial disclosures from her time serving as a state senator in Annapolis.
Maryland State Prosecutor Charlton Howard told the court of bank records from Pugh’s Healthy Holly company showing she earned $345,000 in 2016 alone. Yet, her financial disclosure forms made no mention of the money.
Outside the courthouse, Howard called the conviction a warning for others who seek to enrich themselves in public office.
With her state case concluded, Pugh is scheduled to report June 26 to federal prison in Alabama and begin a three-year term for her federal crimes.
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 her to three years in federal prison. The judge also ordered Pugh to pay more than $400,000 in restitution and forfeit nearly $700,000.
She’s scheduled to serve her time in 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 that 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.
In charging documents for the perjury case, state prosecutors wrote that they investigated Pugh’s company Healthy Holly LLC and found that in 2012 she generated at least $108,000 from book sales, mostly to the University of Maryland Medical System. Then a state senator, her 2012 financial disclosure omits this money.
They found her revenue 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 independent judgment. While a state senator, Pugh served on health and finance committees that took on the issues of health care facilities and insurers. Each year, she signed ethics forms to swear her financial disclosures were accurate and complete.
Pugh served about a decade in the General Assembly before she was elected mayor in late 2016.
On Friday, the judge urged her to spend her time behind bars thinking about how she might someday help again in the struggles of her city.
“I don’t see this as your final chapter,” Crooks told her. “You will have plenty of time in federal penitentiary to regain your bearings and be part of the solution.”
