Catherine Pugh pleaded guilty in federal court in Baltimore to conspiracy to commit wire fraud, conspiracy to defraud the government and two counts of tax evasion. She pleaded not guilty to seven counts of wire fraud that were included in the indictment unsealed a day earlier.
The case centered on sales of her self-published "Healthy Holly" books to nonprofits and foundations to promote her political career and fund her run for mayor. Pugh, a veteran Democratic politician who was elected mayor in 2016, resigned under pressure in May.
Pugh faces up to 35 years in prison at her scheduled Feb. 27 sentencing. U.S. Attorney Robert Hur said she could be sentenced to about five years based on sentencing guidelines, but a judge would make the final determination. Hur added that Pugh's admissions of guilt "demonstrated that she betrayed the trust placed on her."
Pugh only spoke to answer questions from the judge, mostly resting her face on her hands and occasionally speaking with her attorney.
"I do," the ex-mayor said after U.S. District Judge Deborah Chasanow asked her whether she agreed that several facts presented by prosecutors were true, including how books were shuffled from a city warehouse.
Wearing a pinstriped dark coat and scarf, Pugh silently walked out of the courthouse afterward, flanked by attorneys, before leaving in a waiting SUV.
Defense attorney Steven Silverman said in a statement hours later that the former mayor decided to forego a long trial that "would drain essential government resources and cause further distraction from the serious issues" the region faces. He added: "Ms. Pugh sincerely apologizes to all of those that she let down, most especially the citizens of Baltimore whom she had the honor to serve in multiple capacities for decades."
Prosecutors in court Thursday explained how Pugh, helped by her aide Gary Brown Jr., double-sold the illustrated paperbacks and failed to deliver them to institutions they were purchased for, including the Baltimore City Public Schools. They said Pugh used the proceeds to fund straw donations to her mayoral campaign and to renovate a house.
Assistant U.S. Attorney Martin Clarke detailed how the University of Maryland Medical System - one of the state's largest employers - came to be Pugh's biggest book customer. The system paid Pugh a total of $500,000 for 100,000 copies that were meant to be distributed to schoolchildren, but about 60,000 of those books were sent to a city warehouse and a Pugh office from where thousands were later removed to give to other customers.
Pugh never delivered the other 40,000 books the health system purchased for city schools. The system wrote the first check for the books in 2011 and the last one last year.
Pugh, 69, had previously served in the state Senate, where she sat on a committee that funded the medical system. She also sat on the hospital network's board from 2001 until the scandal erupted in March.
The system described some of the purchases as "grants" in federal filings. Pugh returned the last $100,000 payment and described the deal as a "regrettable mistake" after the scheme was uncovered.
Brown and another city employee, Roslyn Wedington, have pleaded guilty to conspiracy to commit wire fraud, conspiracy to defraud the government and filing a false tax return. Their sentencing hearing hasn't been scheduled.
Pugh became Baltimore's second mayor in less than a decade to step down because of 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.
The charges against Pugh came as the city has struggled with violent crime and other cases of public corruption, including a major police scandal: a task force created to get illegal guns off the streets spent years ripping off drug dealers and stealing money from citizens. And this is the fifth consecutive year the city has had more than 300 homicides.
Meanwhile, the police department remains under a federal consent decree requiring sweeping reforms. It was authorized in January after the U.S. Justice Department released a scathing report detailing longstanding patterns of racial profiling and excessive force within Baltimore's police force.
Federal authorities began investigating city police following the April 2015 death of a young black man, Freddie Gray, while in police custody.
Baltimore Police Commissioner Michael Harrison, who began in March, has unveiled a plan to lower high rates of violent crime. He also is seeking to transform a police department distrusted by many because of past police misconduct.
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