Former Baltimore Mayor Indicted on Fraud Charges Over Book Scandal

Pugh, who resigned as mayor in May amid state and federal investigations over the sale of her “Healthy Holly” books to companies that had business ties to the city, faces multiple charges, including wire fraud, conspiracy to defraud the U.S. government and tax evasion.

Most of the “Healthy Holly” books, promoting healthy eating and exercise habits, were never distributed to children as had been promised, the authorities said. Instead, thousands of copies were found in a Baltimore City Public School System warehouse; others were stored in Pugh’s offices and in one of her houses.

Federal prosecutors said the children’s book series was at the heart of an elaborate scheme orchestrated by Pugh to defraud health care companies, Baltimore’s school system and taxpayers by failing to deliver copies of the books that had been paid for.

She was indicted last week but the charges had been kept secret. Pugh, who has previously denied wrongdoing, is expected to appear in federal court Thursday.

Steven D. Silverman, Pugh’s lawyer, declined to comment.

“Our elected officials must place the interests of the citizens above their own,” said Robert K. Hur, the U.S. attorney in Maryland. “Corrupt public employees rip off the taxpayers and undermine everyone’s faith in government.”

In some cases, the indictment said, Pugh sold copies of the same set of books — which had titles like “Exercising Is Fun” and “Vegetables Are Not Just Green” — to two different buyers, enabling her to be paid twice. Pugh “promised a certain number of books at a given price, then kept the money and did not provide the books as promised,” the indictment said.

Pugh, a Democrat and a fixture in Baltimore politics for two decades, received at least $600,000 for the books before and after she became mayor in 2016, according to the indictment. The period also coincided with her tenure as a member of key health committees in the state Senate.

Prosecutors said Pugh used the money from the book deals for her political campaigns, and to buy and renovate a house in Baltimore.

Pugh did not recuse herself from voting or other decision-making on issues related to companies that paid her for the books, including health care firms, and had not disclosed the financial relationships publicly, the indictment said.

The tumult over the “Healthy Holly” books came as Baltimore veered from one crisis to another in recent years. The city has cycled through five police chiefs in four years, contended with stubbornly high homicide rates, and sought to reform a Police Department that is operating under a federal court order intended to end discriminatory practices.

Prosecutors also revealed Wednesday that Gary Brown Jr., who served as an aide to Pugh in the state Senate and at City Hall, had pleaded guilty to fraud and for filing a false tax return. Prosecutors said Brown and Pugh worked from 2011 to 2019 in a “scheme to fraudulently sell and distribute tens of thousands of ‘Healthy Holly’ books.” They said the two provided books to purchasers but then “converted them to their own use at campaign events and government functions.”

Roslyn Wedington, executive director of a nonprofit group that was once led by Pugh, also pleaded guilty to defrauding the government and filing false tax returns. Prosecutors said Wedington, who had led the Maryland Center for Adult Training, a job training program, knowingly filed false tax returns that had been prepared by Brown.

On at least one occasion, children’s books bought by the University of Maryland Medical System — a health care nonprofit organization with extensive business dealings with the city — and promised to public schools instead went to one of Pugh’s offices and were later used “as giveaways to promote her political campaigns,” according to the indictment.

In other cases, thousands of copies of “Healthy Holly” were never printed at all, according to the indictment, even though the medical system paid Pugh $200,000 for them on the condition that they be donated to schoolchildren.

As part of a second investigation, Gov. Larry Hogan, a Republican, has asked state prosecutors to investigate some $500,000 that Pugh received from the medical system. When the arrangement with the medical system began, Pugh was a state senator and sat on the organization’s board of directors.

Pugh resigned from the board this year after The Baltimore Sun reported on the payments. She has returned $100,000 to the medical system and said she had failed to report the arrangement on ethics disclosure forms because of unintentional oversights.

Another health care company with city business, Kaiser Permanente, paid Pugh $100,000 for the books over a three-year period starting in 2015, Kaiser Permanente said.

As news of the unusual arrangements became public and criticism mounted — including from Hogan and other former political allies — Pugh took an open-ended leave of absence after contracting pneumonia and being hospitalized.

After she resigned, Bernard C. Young, the City Council president, became mayor. He is among a crowded field of candidates seeking the office in November 2020.

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