Former UMMS board member faces up to 35 years in prison for fraud scheme

Catherine Pugh, former Baltimore mayor and University of Maryland Medical System board member, pleaded guilty Nov. 20 to four of 11 charges related to a children's book fraud scheme, according to the Justice Department.   

Ms. Pugh pleaded guilty to charges of conspiracy to commit wire fraud, conspiracy to defraud the federal government, and two counts of tax evasion.

Specifically, Ms. Pugh admitted to conspiring with legislative aide Gary Brown Jr. to defraud customers of her Healthy Holly books by failing to deliver purchased books and double-selling them without consent. She admitted to selling, failing to deliver and double-selling $500,000 of books to the Baltimore-based health system, originally intended for donation to the city's public schools.   

Ms. Pugh admitted to using the fraudulent profits from the Healthy Holly books to fund straw donations for her mayoral campaign and to buy and renovate her home. She also admitted to concealing false business expenses from the IRS and filing false income tax returns in 2015 and 2016.

She will be sentenced in February, and she faces a maximum of 20 years in prison for wire fraud, five years for conspiracy to defraud the U.S., and five years for each tax evasion charge, though the DOJ notes actual sentences are typically less than the maximum.

 

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