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Catherine Pugh Pleads Guilty To Tax Evasion, Conspiracy To Defraud The U.S. In 'Healthy Holly' Scandal

BALTIMORE (WJZ) — Former Baltimore Mayor Catherine Pugh has pleaded guilty to several federal charges in the "Healthy Holly" scandal that ultimately led to her resignation. Pugh, 69, pleaded guilty to four of the 11 charges, including conspiracy to commit wire fraud, conspiracy to defraud the U.S. government and two counts of tax evasion.

She was indicted on the charges last week; the indictment was unsealed Wednesday. The indictment alleges Pugh defrauded purchasers of her self-published "Healthy Holly" children's book series and used the money to fund her mayoral campaign.


In addition, the indictment alleges that Pugh conspired to evade taxes on the income received from the sales of Healthy Holly books.

The indictment alleges that for tax year 2016 Pugh claimed her taxable income was $31,020 and the tax due was $4,168, when in fact, Pugh's taxable income was $322,365, with an income tax due of approximately $102,444.

TIMELINE: Mayor Catherine Pugh's 'Healthy Holly' Book Scandal

Investigators claim Pugh concealed from the IRS the fact that she created false business expenses to offset the income she received from the sale of books by issuing Healthy Holly checks to Brown for services and/or products purportedly supplied by his company.

"The indictment alleges that Catherine Pugh betrayed the public's trust. The FBI will continue to diligently work to detect fraud and corruption and hold those who violate this trust accountable," said Special Agent in Charge Jennifer Boone of the FBI's Baltimore Division.

Pugh Leaves Court 3 11.21.19
Former Baltimore Mayor Catherine Pugh leaves the federal courthouse after pleading guilty to four counts in the "Healthy Holly" scandal. WJZ photo.

On Thursday, a judge formally accepted Pugh's guilty plea.

She spoke haltingly in court, WJZ Investigator Mike Hellgren said, but admitted to the "Healthy Holly" scheme, showing little emotion.

Pugh admitted taking $100,000 from a connected businessman under the guise of "Healthy Holly" payments to buy herself a bigger house for entertaining once she became mayor.

She admitted funneling "Healthy Holly" money to her campaign out of fear she'd appear desperate if the public learned she was giving so much money to her campaign.

Pugh faces 35 years for conspiracy to commit wire fraud, conspiracy to defraud US government and tax evasion when she's sentenced in February.

She was released on her own recognizance but had to surrender her passport and admitted to full involvement. Neither Pugh nor her attorney spoke to reporters as they left the courthouse.

WATCH: Ex-Mayor Catherine Pugh Leaves Federal Courthouse After Guilty Plea

U.S. Attorney Robert Hur said Pugh's guilty plea shows she betrayed the trust placed in her by the public.

"The city of Baltimore faces many pressing issues and we need dedication and professionalism from our leaders -- not fraud and corruption -- if we're going to have any hope of fixing these problems," Hur said.

Pugh resigned in May 2019 after federal authorities began looking into where she arranged bulk sales of "Healthy Holly" books to disguise hundreds of thousands of dollars in kickbacks.

The FBI and IRS raided several of her offices and homes -- including City Hall -- in late April and seized items -- including money transfer receipts, a laptop, compact discs and a $100,000 check from the University of Maryland Medical System to Pugh's "Healthy Holly" company.

Read the full indictment here:

The Associated Press contributed to this report.

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