This morning, a federal grand jury indicted former Baltimore mayor Catherine Pugh on 11 counts for fraud and tax evasion as a result of her Healthy Holly children’s book scandal. The indictment alleges that our recent mayor defrauded local businesses and non-profit organization out of $800,000 to unlawfully enrich herself, buying a new house and paying down debts, and fund her planned campaign for reelection. At the same time, she defrauded the IRS, reporting an income of just $31,000, when in fact her income was over $322,000, defrauding the government of about $100,000. Ms. Pugh is facing a maximum of 175 years in prison, seizure of the $800,000 plus the house she used her ill gotten gains to purchase and renovate.
Mayor Pugh used her position on the board of directors of the University of Maryland Hospital System to convince her fellow directors to vote her a no-bid contract for the purchase of her Healthy Holly children’s books she had authored. Associated Black Charities and Kaiser Permanente also purchased a total of another 30,000 books. At the time of the purchase, Kaiser Permanente was lobbying to be awarded the contract to provide insurance to Baltimore City employees. Associated Black Charities planned to use the books to help teach reading to children in the city. Pugh only had a small fraction of the books made, only a few of these poorly written books containing multiple spelling errors reached any children. The revelations of the scandal forced the mayor’s resignation last spring.