Ex-Baltimore Mayor Catherine Pugh indicted on fraud charges in children's books probe

She resigned in May after authorities began investigating whether she arranged bulk sales of her books to disguise hundreds of thousands of dollars in kickbacks.
Image: Baltimore mayor, Catherine Pugh.
Former Baltimore Mayor Catherine Pugh.Andre Chung / for NBC News file

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By Minyvonne Burke and Associated Press

Former Baltimore Mayor Catherine Pugh was indicted on multiple charges Wednesday, including wire fraud and tax evasion, in connection with the sales of her self-published children's books.

The U.S. Attorney's Office in Maryland announced the charges in an 11-count federal indictment alleging that Pugh used her company, Healthy Holly, to publish books and then sell them "directly to nonprofit organizations and foundations, many of whom did business or attempted to do business with Maryland state government and Baltimore City."

Pugh resigned in early May after authorities began probing whether she arranged bulk sales of “Healthy Holly” books to disguise hundreds of thousands of dollars in kickbacks.

Her resignation came after FBI and IRS agents raided her offices, homes and other locations in late April and seized several items, including money transfer receipts, a laptop, compact discs and a $100,000 check from the University of Maryland Medical System to Pugh's "Healthy Holly" company.

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Pugh sold four books in June 2011, March 2013, August 2015 and August 2017, earning her a reported $800,000. The indictment also says that Pugh did not keep a personal bank account and instead combined it with her business accounts.

Pugh has been in seclusion since early April, when she took a leave from the mayor’s office due to what her lawyer described as poor health following a bout of pneumonia. Attorney Steven Silverman at that time asserted that Pugh was so fragile physically and mentally that she was unable to make "major decisions."

Federal, state and local probes have been looking into questionable financial arrangements for her hard-to-find books. The books were meant to be provided to schools and day care centers, but it's unclear where tens of thousands of copies ended up.

The Democrat was elected mayor in 2016 after having served in the state Legislature since 2005. As a state senator, she once sat on a committee that funded the University of Maryland Medical System, one of the state’s largest private employers.

The hospital network — on whose board she sat starting in 2001 and until the scandal over the illustrated paperbacks erupted in March — was Pugh’s biggest book customer.

The system paid Pugh $500,000 for 100,000 copies. There was no contract behind the deal and the medical system described some of the purchases as “grants” in federal filings. She returned her most recent $100,000 payment and described the deal as a "regrettable mistake" during a news conference days before she retreated from public view.

Health care provider Kaiser Permanente also disclosed that it paid Pugh’s Healthy Holly LLC about $114,000 between 2015 and 2018 for roughly 20,000 copies of the books. She oversaw Baltimore’s spending board in 2017, when the city awarded a $48 million contract to the Kaiser Foundation Health Plan of the Mid-Atlantic States Inc.

Pugh, 69, became the second mayor of Baltimore in less than a decade to step down because of a scandal. Former Mayor Sheila Dixon left office in 2010 as part of a plea deal for misappropriating about $500 in gift cards meant for needy families.

A longtime city council member, Bernard "Jack" Young, took over as mayor after Pugh resigned.