In the days leading up to her sentencing for fraud and tax evasion, Catherine Pugh’s friends, political allies, lawyers and Pugh herself – by means of a highly polished video – had been touting the ex-mayor’s record of public service as a reason for mercy.
That argument struck U.S. District Court Judge Deborah K. Chasanow as “ironic” today.
“It was precisely that service that enabled Ms. Pugh to continue the fraud,” Chasanow said before sentencing the 69-year-old to three years in prison and three years of probation for her Healthy Holly children’s book scheme.
“She shamelessly hawked the books and teamed up with [Associated Black Charities] and other community outreach organizations as part of a way to make money and promote herself and her political situation,” U.S. Attorney Martin Clarke said.
“She spoke the language of these groups, she bantered with them,” Clarke said, calling the breadth and sophistication of Pugh’s scheme while both a state senator and the mayor of Baltimore “shocking” and “astounding” in his address to a packed courtroom.
Chasanow said she agreed. “This was not a tiny mistake, a lapse of judgement. This was a very large fraud.”
“I did turn a blind eye”
Sniffing back tears as she addressed the judge, Pugh apologized to “the citizens of the city, state and country” as well as “to anyone I’ve offended or hurt by my actions.”
“I did turn a blind eye. I did sanction many things I should not have,” the 69-year-old Pugh said. “I apologize for all that has led me here.”
“None of this was intentional, what it turned out to be” – Catherine Pugh.
Outside the courthouse, she was more composed, and even defiant, chiding the media that had covered the FBI raid on her house last April.
“Those lights y’all shined on the corner of my street – it was painful,” she said.
Saying she was looking forward to “rebuilding my life and getting myself back together, she reiterated what she had said in the courtroom, “None of this was intentional, what it turned out to be.”
The prosecutors, however, made the case that Pugh’s scheme was highly organized and “wasn’t just hatched overnight.”
Clarke ran through the mechanics necessary to carry out the sale of hundreds of thousands of dollars worth of low-quality children’s books that were never delivered to children, were double-sold or were never even printed.
The money was “parked” in the account of her Washington Boulevard clothing consignment store, “2 Chic Boutique,” he said, and hidden in the other entities she created with the help of longtime aide, Gary Brown.
Counting the $170,000 she got from businessman J.P. Grant and used for her 2018 mayoral campaign and to buy a new house, prosecutors said that she netted in all $850,000 – none of it reported to the IRS.
“It was like something right out of a mobster movie,” Clarke marveled. “She had her bagman Gary Brown. She calls in to the [bank] teller. They give it to Mr. Brown. He goes around town and hands it out to the straw donors.
“Ms. Pugh orchestrated these acts. Gary Brown was just Ms. Pugh’s minion,” he said, detailing the “fake invoices” and “false tax returns” they used.
“It was like something right out of a mobster movie” – Prosecutor Martin Clarke.
Clarke spoke witheringly of Pugh’s “hypocrisy,” describing how “while she’s bragging she’s reducing crime, she’s committing wire fraud.”
Pugh “deliberately and cunningly set out to deceive people” and to “rig an election to her advantage and cover it all up,” Clarke said, adding,
“To influence an election in one of the largest cities in America, such conduct is outrageous.”
Attorney Steve Silverman painted a very different picture of Pugh, calling her “a regional civil rights leader” and described the crimes she was convicted of as “a one-off.”
He walked through her resume – the newspaper she created in the early 1980s, the Baltimore Design School she fought for, the Baltimore Marathon she started, and the “hurtful Confederate monuments” that she took down as Baltimore’s mayor.
“This lady has done more in one lifetime than other people could accomplish in 100 lifetimes,” he said. “I don’t know how that is not taken into consideration today.”
“She got sucked into the culture of what was going on with the UMMS board” – Attorney Steve Silverman.
“Now she stands before you a broken woman,” he said, describing how, after Pugh was indicted, “she was confined to her bedroom, sobbing inconsolably for hours at a time, leaving no doubt she understood the harm that she did.”
In defending Pugh and asking Chasanow to impose a sentence of one year and one day, Silverman not only spoke of her good works, but pointed a finger at other entities, primarily the University of Maryland Medical System.
Other UMMS board members had multiple business dealings with the hospital network, which paid $400,000 to Pugh to print and distribute her Healthy Holly books.
“Catherine Pugh was wrong, she should have known better, she was better than this,” he said. “But she got sucked into the culture of what was going on with the UMMS board – that everyone had an opportunity to do business.”
“We love her”
Argentine S. Craig, who said she has known Pugh for 50 years as her high school teacher and as her current mentor, called Pugh “a humanitarian.”
“She is a person who gives, reaches out and includes people in making change,” Craig said. “She is about education and learning.”
“We love her. We care about her. She can come share with these young people about humility and how you can come back,” added Garrick Williams, a Park Heights community leader and youth coach.
Former Baltimore Mayor Kurt Schmoke, noting that he is also a former prosecutor, said Pugh’s case calls for “minimum incarceration and maximum community service.”
He said he and other supporters hope her “last chapter does not end with what happens in this courtroom today.”
Books to be Destroyed
As part of her sentence, Pugh is to pay restitution of $400,000 to UMMS and nearly $12,000 to the Maryland Auto Insurance Fund, which also paid Pugh for books.
She will have to forfeit about $670,000, including her house in Ashburton and the $17,800 that remains in her campaign account.
Pugh also agreed that all of her copies of Healthy Holly books, collected by the FBI in raids, will be destroyed.
Chasanow allowed her to remain free until April 13, when she must report back to the court.