Former Mayor Catherine Pugh was sentenced Thursday to three years in prison, followed by three years of probation, for her fraud scheme involving her “Healthy Holly” children’s book series.
The judge also ordered Pugh to pay $411,948 in restitution and to forfeit $669,688 including property on Ellamont Road in Baltimore and $17,800 from the Committee to Re-elect Catherine Pugh.
Baltimore City officials reacted with sadness and a push to do better following the sentencing.
Before Pugh even received her sentence, City Council President Brandon M. Scott released a statement Thursday morning about the steps the council is taking to ensure similar misconduct by an elected official does not happen again.
“Today marks a somber moment for Baltimore, as our former Mayor is sentenced for her unethical acts that seriously undermined the public’s trust in our local government,” Scott said.
When the “Healthy Holly” scandal came to light last year, Scott said he led the city council’s effort to call for Pugh’s resignation. Pugh resigned in May, after which then-Council President Bernard C. “Jack” Young filled the role of mayor and, in turn, Scott became council president.
The sentencing provides a bookend in the “Healthy Holly” scandal that became public nearly a year ago with an article first reported in The Baltimore Sun in March 2019.
That article revealed that Pugh and other members of the University of Maryland Medical System’s board of directors had hundreds of thousands of dollars worth of business deals with the hospital network.
Among those deals, UMMS purchased thousands of copies of Pugh’s “Healthy Holly” children’s books.
It later came to light that Pugh had been selling books but not delivering the orders, having books purchased on behalf of a third party but then using some or all of the order for her personal use, or picking up copies from previous orders to re-sell them, prosecutors detailed in a sentencing memorandum earlier this month.
Pugh had also solicited campaign and personal donations through book sales, prosecutors said.
Federal prosecutors charged Pugh in November with 11 counts of wire fraud, conspiracy to defraud the U.S., conspiracy to commit wire fraud and tax evasion related to the “Healthy Holly” scandal. Pugh pleaded guilty to four counts of conspiracy, fraud and tax evasion.
With the sentencing Thursday, Baltimore closes a chapter in the “Healthy Holly” story. But the work is hardly over in repairing the damage done to the public’s trust and closing policy loopholes that made it easier for the scheme to occur, Scott said.
Since Pugh’s resignation, Scott said the council “has taken significant steps toward increasing transparency and changing the culture of corruption in City Hall” including legislation expanding certain provisions to prohibit Baltimore City elected officials and staff from soliciting and accepting gifts and to require elected officials to disclose financial disclosure information.
Additional pieces of ethics legislation are currently under consideration.
Scott, who is running for mayor, said the sentencing offers an opportunity for Pugh and the city to move forward.
“If there’s one thing I know about Baltimore, it’s that we are a resilient city,” he said. “We don’t give up. Our city must not continue to be defined by unethical leadership. Let us continue to be motivated by a guiding purpose of serving our residents’ best interests.”
District 4 Councilman Bill Henry acknowledged constituents’ anger and distrust of city government.
“The corruption uncovered over the past year has resulted in a citizenry that is angry, frustrated, and disappointed with local government,” he said. “We need to move forward and focus on getting our city back on track.”
Getting back on track requires resident collaboration, Henry said. He encouraged people to come to the Equity & Structure committee’s next community work session at 6:30 p.m. March 2 at Edmondson Westside High School to tell the council what they feel needs to change “to bring back accountability, transparency, and trust.”
Henry said Baltimore should not let the scandal hold it back–rather, the city should use this moment as an impetus to improve.
“We can’t forget–nor should we–the shame of being let down by those who were custodians of public trust,” he said. “We also can’t let it keep us from working harder and fighting harder to make Baltimore better.”
Henry is running to unseat Comptroller Joan Pratt, Pugh’s business partner in a high-end consignment shop, 2 Chic Boutique.
Thiru Vignarajah, former federal prosecutor and Deputy Attorney General of Maryland and a candidate for mayor, said justice has been done in this case and that the prison sentence should signal to voters and Baltimore leaders that “city corruption will not be tolerated anymore and that we can do better.”
Like the other officials who gave statements, Vignarajah hoped Baltimore–and Pugh–would rise from this experience.
“I pray that the former mayor learns from this and comes out stronger and that our city learns from this lesson and comes out stronger too,” he said. “So long as we do, we as a city can move past the corruption of yesterday and write a new chapter we can all be proud of.”
In a sentencing memorandum Feb. 13, federal prosecutors called for Pugh to be sentenced to 57 months–nearly five years–in prison.
The following day, in a Feb. 14 sentencing memorandum, Pugh’s attorneys asked for their client to be sentenced to one year and one day in prison.
On Thursday, U.S. District Judge Deborah K. Chasanow handed down a sentence that fell in between.
“The defendant’s scheme to cheat the taxpayers of Baltimore was as bold as it was brazen, and today’s sentence shows that the punishment for those actions is swift and severe,” Alfred Watson, Assistant Special Agent in Charge of the Baltimore Division of the FBI, said in a statement. “The public has a right to expect and demand honesty and integrity from their public servants and the FBI stands ready with our law enforcement partners to uphold those principals in our system.”
In a 13-minute video submitted to the court by her attorneys yesterday, Pugh apologized to the citizens of Baltimore, young people, partners, friends, everyone she has offended and hurt, and the city’s image.
“When I think about me and my capacity and my capabilities and all the things I’ve been able to do, I say ‘How do you end up here? How do you mess this up?’” she said. “I messed up. I really messed up. I’m so sorry. I really am sorry.”
After the sentencing, Pugh said “Nobody loves Baltimore more than I do.”
She added that she wants the citizens of Baltimore to move forward and “to continue to believe in the future of our city.”
“This isn’t the last you’ll hear of Catherine Pugh”
Following sentencing on fraud/tax charges Catherine Pugh apologized and said she will now rebuild her life. She will serve 3 yrs in federal prison pic.twitter.com/R5awIIhwVZ
— Jayne Miller (@jemillerbalt) February 27, 2020
Pugh said this is a time for her to rebuild her life.
“I don’t think this is the last chapter for Catherine Pugh,” she said.
— Luke Broadwater☀️ (@lukebroadwater) February 27, 2020
Federal prosecutors also addressed media after the sentencing. U.S. Attorney for the District of Maryland Robert K. Hur called Pugh’s fraud scheme “a tragedy and the last thing our city needs.”
Federal prosecutors to speak after sentencing of former Baltimore Mayor Catherine Pugh https://t.co/d7AD37WAvF
— Luke Broadwater☀️ (@lukebroadwater) February 27, 2020