BALTIMORE (WJZ) -- The Federal Bureau of Investigation and the Internal Revenue Service raided Baltimore Mayor Catherine Pugh's house and City Hall and several other locations Thursday morning.
The FBI confirmed that agents from the FBI Baltimore Office and the IRS Criminal Division based in Washington, D.C. executed court-authorized search warrants.
Pugh met with her legal team Thursday afternoon inside her current home on Ellamont Avenue to understand her options.
Attorney Steve Silverman said Pugh is not mentally or physically able to make any decisions Thursday.
The feds raided five locations: City Hall, Pugh's home on Ellamont Avenue, Pugh's second home on Dennlyn Avenue, the Maryland Center for Adult Training and Pugh's former aide Gary Brown Jr.'s home. The feds also served a subpoena to Pugh's attorney.
Agents left Pugh's home with boxes of evidence, including some labeled with "Healthy Holly" book stickers, after hours of searching the homes.
City Solicitor Andre Davis said he has received from the IRS/FBI agents a return for an inventory of what was seized during the search. He said the search was limited to the Mayor's suite offices on the second floor of City Hall.
"I have made the determination that disclosure of the return at this time would be premature, and may well impede the success of the ongoing investigation," Davis said. He said he cannot say when he will release the return.
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What led to the raid?
Pugh is on a leave of absence, citing her health as the reason, after battling pneumonia. But her health issues came amid weeks of controversy regarding her self-published "Healthy Holly" children's books.
She's accused of receiving about $800,000 in profit from the sales of her books to companies that later earned business with the city.
Pugh sold $500,000 worth of her books to the University of Maryland Medical System. Officials are reviewing deals with at least three businesses: Carefirst, Kaiser Permanente and Ariel Investments.
WJZ confirmed that Ariel Investments paid Pugh $3,600 for 400 "Healthy Holly" books to distribute at a 2013 conference in which she spoke.
In September of 2017, at a Black Corporate Directors Conference sponsored by Ariel, paid for Pugh to attend the California conference.
Five months later, Baltimore's Board of Estimates approved a $40 million contract with Ariel.
Calls for Pugh's Resignation
In light of the raid, several Maryland officials continued to call for Pugh's resignation, including Gov. Larry Hogan.
"On April 1, I directed the state prosecutor to investigate the disturbing allegations surrounding Mayor Catherine Pugh's questionable financial dealings with the University of Maryland Medical System. Today, Federal law enforcement agents are raiding Baltimore's City Hall, the homes of Mayor Catherine Pugh and the office of her attorney," Hogan said in a statement.
"Now more than ever, Baltimore City needs strong and responsible leadership. Mayor Pugh has lost the public's trust. She is clearly not fit to lead," Hogan continued. "For the good of the city, Mayor Pugh must resign."
City Councilman Brandon M. Scott said, "Mayor Pugh should resign immediately."
"Baltimore needs to move forward and heal from this embarrassment. Baltimore is a great and resilient city, but we can't waste anymore time on this issue," said Scott. "There are many important issues in front of us that require the complete attention of a full-time Mayor. Our focus must continue to be fighting crime and improving the schools in our city."
Acting Mayor Jack Young stopped short of calling for her resignation, but said, "It is embarrassing for the city of Baltimore, it's embarrassing we're on the national news for this whole episode I would call it"
Residents React To Raid
"I think they're looking for the evidence that they need to prosecute," said Jeffrey Davis, Pugh's neighbor in Northwest Baltimore.
Neighbors watched as the FBI's Baltimore office and the IRS' criminal division out of DC searched the two houses.
State records show the Dennlyn Road address is linked to her Healthy Holly book franchise.
"Until you get regular people in there that's gonna do their job the right way, then that's when our city is gonna get right," said Michelle Hopkins, who lives in the Park Heights neighborhood where the adult training center.
Residents at the bustling corner of Pennsylvania and North Avenues to the Avenue in Hampden had a lot to say about the raids.
"I'm glad she's gone, I hope she do go," said Marcus Alston.
"I think she should resign," Libby Cole added. "I think Baltimore has too many issues, and too many things to focus on to have problems like this, and have the distraction."
"As far as we know right now, all the deals we have, it seems like she should really resign," said Matt Post.
The future of the city's top office is top of mind and opinions are intensifying.
Legal expert Adam Ruther said the federal investigators could be looking at charges for tax evasion, failure to file taxes and other "white collar" crimes.
They could also be looking at public corruption crimes -- in the case that Pugh agreed to perform some official act in exchange for any benefits.
It all depends on what the evidence shows.
Ruther said the best advice he has for Pugh is that she cooperate with the investigation.
Other organizations involved in the book deals may have to be interviewed by the feds as well. The University of Maryland Medical System said Thursday they received a grand jury subpeona.
"The University of Maryland Medical System has received a grand jury witness subpoena today from the U.S. Attorney's Office for the District of Maryland seeking documents and information from UMMS in order to conduct their investigation of Mayor Pugh. We are fully cooperating with the investigative process," UMMS said.
This is a developing story. Stay with WJZ for updates.
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