BALTIMORE — An Anne Arundel County judge on Friday sentenced former Baltimore Mayor Catherine Pugh to six months in prison for deliberately lying on financial disclosures forms to hide her lucrative “Healthy Holly” children’s book business.
Under terms of Pugh’s plea deal her time will be served concurrent with a separate, pending three-year prison sentence, which is set to begin next week. During Friday’s hearing in Annapolis, Pugh, 70, pleaded guilty to one misdemeanor count of perjury, admitting she withheld hundreds of thousands of dollars from the disclosure forms she filed during her years as a state senator.
The perjury charge carried a maximum penalty of 10 years in prison, but Pugh’s attorneys and state prosecutors recommended the six-month sentence accepted by the judge. She was charged with perjury in Anne Arundel Circuit Court because her crime traces to the financial disclosures from her time serving as a state senator in Annapolis.
Pugh answered a series of questions designed to make sure she was freely pleading guilty but chose not to speak. As he sentenced Pugh, the judge said he was “truly saddened” when he learned of Pugh’s federal charges and the scheme outlined in a federal grand jury indictment.
Assistant State Attorney Charlton Howard introduced bank records from Pugh’s Healthy Holly LLC showing she was the sole owner of the company and earned hundreds of thousands of dollars. But in her financial disclosure forms for the senate Pugh “failed to disclose the interest she had in Healthy Holly LLC,” Howard said.
Howard told the court that for many years Pugh reported other outside income and other business interests, but consistently kept secret her ownership and profits from Healthy Holly.
With her state case resolved, Pugh is scheduled to report to federal prison in Alabama on June 26 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, Ala.
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 the 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 earned at least $108,000 in book sales, mostly to the University of Maryland Medical System. Then a state senator, her 2012 financial disclosure omits this money.
They found her earnings 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. 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.
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