Pughsentencingmemo PDF

Case 1:19-cr-00541-DKC Document 17 Filed 02/13/20 Page 1 of 37
IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MARYLAND
CRIMINAL CASE NO. DKC-19-0541
UNITED STATES OF AMERICA,

v.
CATHERINE ELIZABETH PUGH,
Defendant.
GOVERNMENT=S SENTENCING MEMORANDUM
Martin J. Clarke
Leo J. Wise
Assistant U.S. Attorneys
36 South Charles Street
Fourth Floor
Baltimore, Maryland 21201
(410) 209-4800
TABLE OF CONTENTS
I. Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
A. Stipulation to Statement of Facts and

Advisory Guideline Range . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
II. The Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
III. Argument . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
A. The Defendant Engaged in a Multidimensional Scheme to

Defraud that Spanned More Than Seven Years . . . . . . . . . . . . . . . . . . . . . 4
1. The Fraudulent Sale and Dissipation of Book One . . . . . . . . . . . . . . . . . . 5

2. The Fraudulent Sale and Dissipation of Books Two and Three . . . . . . . . 7
3. False Promises to Print and Deliver Books . . . . . . . . . . . . . . . . . . . . . . . 8
B. The Defendant Corruptly Solicited Funds from Purchasers

Doing Business with State and City Government . . . . . . . . . . . . . . . . . . . . 10
C. The Defendant Deliberately Misused Her Publishing Business

to Gain a Political Advantage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
D. The Misuse of Government Resources to Execute the Fraud . . . . . . . . . . . 14
E. The Defendant Laundered Proceeds of the Scheme to Defraud

through Her Publishing Business to Fund Straw Donations
to Her Mayoral Campaign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
F. The Solicitation of Illegal Campaign Contributions from

a Book Purchaser . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
1. The $20,000 Check Payable to 2 Chic Boutique . . . . . . . . . . . . . . . . . . . . . 17

2. The $50,000 Check Payable to Healthy Holly . . . . . . . . . . . . . . . . . . . . . . 18
3. The $100,000 Check Payable to Healthy Holly . . . . . . . . . . . . . . . . . . . . . 19
G. The Fraud Perpetrated upon the IRS was Also Longstanding

and Sophisticated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
1. Hiding the Income Generated by Healthy Holly Sales

in 2015 and 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
2. Filing a False Tax Return for 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
3. Filing of a False Tax Return for 2 Chic Boutique in 2016 . . . . . . . . . . . . . 22
H. The Use of a Philanthropic Message to Defraud . . . . . . . . . . . . . . . . . . . . . 24
I. The Cover-Up . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
1. Pugh Paid for Gary Brown’s Lawyers to Keep Him Quiet . . . . . . . 25

2. Orchestrated Lies to the Public . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
a. Statements to the Press . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
b. False Statements on Financial Disclosure Forms . . . . . . . . . . . . 29
3. Pugh’s Attempt to Prevent the Seizure of Her Cell Phone . . . . . . . 30
IV. Sentencing Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MARYLAND
UNITED STATES OF AMERICA :
V. :
CRIMINAL NO. DKC-19-0541
CATHERINE ELIZABETH PUGH, :
Defendant. :
:
...oooOooo...
GOVERNMENT’S SENTENCING MEMORANDUM
The United States of America, by its counsel, Robert K. Hur, United States Attorney for
the District of Maryland, and Martin J. Clarke and Leo J. Wise, Assistant United States Attorneys
for said district, hereby submits its Sentencing Memorandum in the above-captioned case.
I. Introduction
In February 2017, federal law enforcement agents initiated a criminal investigation of then-
Mayor Catherine Pugh. On November 14, 2019, a federal grand jury returned an eleven-count
indictment. ECF No. 1. One week later, on November 21, 2019, pursuant to a plea agreement,
Pugh pled guilty to four counts of the Indictment: Count One, conspiracy to commit wire fraud,
in violation of 18 U.S.C § 1349; Count Nine, conspiracy to defraud the United States, in violation
of 18 U.S.C. § 371; and Counts Ten and Eleven, tax evasion for years 2015 and 2016, respectively,
in violation of 26 U.S.C. § 7201. ECF No. 12. Pugh’s sentencing hearing is scheduled for
February 27, 2020 at 10:00 a.m.
A. Stipulation to Statement of Facts and Advisory Guideline Range
Pursuant to the plea agreement, Pugh stipulated to facts the government would have proven
beyond a reasonable doubt had the case proceeded to trial. ECF 12, Att. A at 5. Consistent with
those facts, Pugh also stipulated to the applicability of various sentencing factors set forth in the
U.S. Sentencing Guidelines (“USSG”). Id. In accordance with the Guidelines’ grouping rules for
multiple offenses, the agreed upon sentencing guideline factors are set forth below. 1
Count One (conspiracy to commit wire fraud)
Base offense level (USSG §§ 2B1.1(a)(1), 2X1.1(a)) 7
Upward adjustment for loss resulting from the offense +12

(more than $250,000 but less than $500,000)
(USSG § 2B1.1(b)(1)(G))_______________________________
Subtotal 19
Upward adjustment for sophisticated means +2

(U.S.S.G. § 2B1.1(b)(10)(C))
Upward adjustment for abuse of a position of

public trust (USSG. § 3B1.3) +2
Upward adjustment for misrepresentation of +2

actions on behalf of a charitable or educational
organization (U.S.S.G. § 2B1.1(b)(9)(A)
Grouping - multiple count adjustment (USSG +1

_____________________________________________________
Subtotal 26
Downward adjustment for timely acceptance of -3

responsibility (USSG 3E1.1(a) &(b))
_____________________________________________________
Final adjusted offense level 23
The applicable guideline range for an offense level of 23 and a criminal history category
of I is 46-57 months of imprisonment. In accordance with the sentencing guidelines and the
statutory considerations under 18 U.S.C. § 3553(a), the criminal conduct to which Pugh has pled
1
The parties’ calculation of the final adjusted offense level and applicable guideline range is in accord with the
Presentence Investigation Report (“PSR”) issued by U.S. Probation.
2
guilty warrants a guideline-sentence of 57 months of imprisonment. For the reasons set forth
below, the maximum sentence within the applicable guideline range provides an adequate and just
punishment for Pugh’s longstanding pattern of criminal conduct and serves to deter other would-
be corrupt politicians from breaching the public’s trust.
II. The Law
A sentence must be both procedurally and substantively reasonable. United States v. Blue,
877 F.3d 513, 517 (4th Cir. 2017), citing Gall v. United States, 552 U.S. 38, 41 (2007).
Reasonableness “is not measured simply by whether the sentence falls within the statutory range,
but by whether the sentence was guided by the Sentencing Guidelines and by the provisions of §
3553(a).” Blue, 877 F. 3d. at 517, quoting United States v. Green, 436 F.3d 449, 456 (4th Cir.
2006). As the Fourth Circuit noted,
[A] district court shall first calculate (after making the appropriate findings of fact)
the range prescribed by the guidelines. Then, the court shall consider that range as
well as other relevant factors set forth in the guidelines and those factors set forth
in § 3553(a) before imposing the sentence. If the court imposes a sentence outside
the guideline range, it should explain its reason for doing so.
Green, 436 F.3d at 455–56, citing United States v. Hughes, 401 F.3d 540, 546 (4th Cir. 2005).
Pursuant to § 3553(a), the Court should “impose a sentence sufficient, but not greater than
necessary” after considering all of the statutory sentencing factors. 18 U.S.C. § 3553(a). The
sentencing factors the Court must consider are:
(1) the nature and circumstances of the offense and the history and characteristics of
the defendant;
(2) the need for the sentence imposed—
(A) to reflect the seriousness of the offense, to promote respect for the law,
and to provide just punishment for the offense;
(B) to afford adequate deterrence to criminal conduct;
(C) to protect the public from further crimes of the defendant; and
(D) to provide the defendant with needed educational or vocational training,
medical care, or other correctional treatment in the most effective manner;
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(3) the kinds of sentences available;

(4) the kinds of sentence and the sentencing range established for--
(A) the applicable category of offense committed by the applicable
category of defendant as set forth in the guidelines . . .
(6) the need to avoid unwarranted sentence disparities among defendants with
similar records who have been found guilty of similar conduct; and
(7) the need to provide restitution to any victims of the offense.
Id.
III. Argument
The facts establish that Pugh deliberately engaged in a broad range of criminal acts while
serving as Maryland State Senator and Mayor of Baltimore City. She used the stature of those
elected offices to solicit fraudulent book sales that generated substantial revenue for her publishing
business, part of which she used to influence her 2016 mayoral election campaign in violation of
state election laws. With the assistance of Gary Brown, her longtime legislative aide and campaign
worker, Pugh methodically expanded her illegal scheme and managed to conceal it from state and
federal authorities and, most important, the citizens she served. In short, over the course of seven
years, Pugh corruptly devised and executed a fraudulent scheme to exploit her public office for
private gain.
A. The Defendant Engaged in a Multidimensional Scheme to Defraud that

Spanned More Than Seven Years
The defendant’s scheme to defraud is remarkable in both its scope and duration. Unlike
some convicted fraudsters, Pugh’s decision to con book purchasers was not an impulsive one, nor
the desperate act of someone facing financial ruin. Rather, it was a well-considered business
decision to achieve multiple ends. First, converting the books to her own use provided an almost
endless supply of free inventory that maximized the profit she made from double-selling the books.
Second, choosing not to fill certain book orders yielded nearly a 100% profit on certain
4
transactions. Third, the free inventory of books provided an endless supply of giveaways that she
handed out at campaign and government events, thereby simultaneously promoting herself as both
an author of children’s books and a worthy candidate for elected office.
Pugh had an undergraduate degree and a master’s degree in business and marketing, so she
understood the entrepreneurial costs of starting a for-profit publishing business. Indeed, in
approximately October 2011, about four months after 20,000 copies of UMMS’s Book One were
moved to the Baltimore City Public Schools (BCPS) Warehouse (BCPS) (hereafter the “City
Warehouse”), Pugh noted the high cost of producing books in her 3-year Healthy Holly business
plan. Ex. 1 (Healthy Holly Company Overview). She calculated that it would cost $180,000 just
to produce the books, not including hundreds of thousands of dollars more to pay for “staff”,
“consulting services,” “office exp[enses]” and “marketing.” Id.
At that time, Pugh’s annual salary as a state senator, as well as the money she made through
her small marketing business (Catherine E. Pugh and Company, Inc.), did not provide enough
capital for her to pursue her entrepreneurial dream of running a successful publishing business.
Consequently, to lower her costs and jumpstart the business, Pugh decided to steal the books that
had been donated to Baltimore City schoolchildren.
1. The Fraudulent Sale and Dissipation of Book One
There was only one edition of Book One (Exercising is Fun), and Pugh only printed 2,110
copies for herself. The remaining balance of 20,000 copies was sold to UMMS on behalf of BCPS.
Ex. 2 (Summary of Books Sold). On June 10, 2011, Pugh’s copies of Book One were delivered
to her Senate legislative office on Druid Park Drive, Baltimore. Id. On October 6, 2011, four
months later, essentially all of those books (2,000 copies) were sold to Grant Capital Management
(“GCM”) for $14,000. Id. Multiple witnesses confirm that those books were, in fact, delivered to
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Associated Black Charities on behalf of GCM. Thus, as of October 6, 2011, Pugh had no
inventory of Book One left.
Nonetheless, the next day, on October 7, 2011, Pugh sold another 1,000 copies to CareFirst
for $7,000. Id. A few months later, Pugh sold 110 copies to the Women Legislators of MD and
50 copies to the St. Mary’s Auxiliary for $880 and $400, respectively. Id. In 2013, Pugh sold
200 copies to Ariel Investments for $1,840. In 2015, she sold 990 copies to Kaiser Permanente
for $4,950. Id. Pugh never attempted to print a second edition of Book One to fill any of those
orders. In sum, Pugh used 2,350 copies that belonged to BCPS to fill the foregoing orders and
unlawfully pocket a total of $15,070.
Pugh’s decision in October 2011 to begin converting BCPS’s copies of Book One to her
own personal use and financial gain did not involve just double-selling. She also began the regular
practice of using those books as free giveaways at campaign events, government functions, and
school visits. The use of a stolen children’s book as a promotional product to increase name
recognition during and in between political campaigns is particularly egregious. To make sure she
always had ready access to the books, witnesses recounted to investigators how Pugh regularly
demanded that her legislative staff and campaign workers stock her legislative offices and
government vehicles with copies of Book One. The net effect over a seven-year period was the
dissipation of virtually all 20,000 copies of Book One purchased by UMMS on behalf of BCPS.
Beginning in March 2019, federal agents searched for any remaining copies of the Healthy
Holly book series. No copies of Book One were located at the City Warehouse. However, 1,742
copies were recovered from various locations associated with Pugh, including 1,619 copies in the
custody of a moving company that had removed the books from Pugh’s legislative office in
6
Baltimore; 22 copies from Afra Vance-White, a Pugh staff member; 16 copies from Pugh’s
residence; and 84 copies from BCPS school No. 237. Ex. 3 (Summary of Disposition of Books).
The foregoing chronology establishes that, of the 20,000 copies of Book One purchased by
UMMS for $100,000 and delivered to BCPS, 2,350 were double-sold to unsuspecting purchasers
and 15,908 were dissipated via giveaways (including the 1,742 copies recovered from Pugh-related
locations).
2. The Fraudulent Sale and Dissipation of Books Two and Three
Pugh improved upon her fraudulent scheme when she convinced UMMS to donate Books
Two and Three to BCPS. When Pugh printed the only edition of Book Two (Healthy Start for
Herbie) to fill UMMS’s $100,000 order for 20,000 copies, she printed a mere 100 additional
copies for herself (for a total of 20,100 copies). Ex. 2. She delivered 1,400 copies of UMMS’s
order directly to her legislative office in Baltimore so she could readily resell or use them. The
balance of 18,600 copies was stored at the City Warehouse. 2 Id. Notwithstanding never having
more than 100 copies of Book Two in her company’s inventory, she successfully sold 3,756 copies
to four unsuspecting purchasers for $26,840 during a 3-year period between August of 2012 and
December 2015. Id.
In April 2019, agents recovered 1,393 copies of Book Two from the following locations:
1,289 copies from a moving company that had moved the books from Pugh’s legislative office in
Baltimore; 21 copies from Afra Vance-White; and 81 copies from Pugh’s residence. The
remaining 16,407 copies of Book Two were dissipated via giveaways.
When Pugh printed the only edition of Book Three (Fruits Come in Colors Like the
Rainbow) to fill UMMS’s $100,000 order for 20,000 copies, Pugh only printed an extra 1,000
2
Pugh’s fraudulent intent to double-sell Book Two was apparent from the outset. In an email she sent to the
printing company on December 12, 2012, she stated, “Let’s make that 18500 [for the] schools and 1500 [for] me.”
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copies for herself (for a total of 21,000 copies). Ex. 2. However, she delivered 500 copies of
UMMS’s order directly to her legislative office in Baltimore so she could readily resell or use them
as if they were her own, and the balance of 19,500 copies was stored at the City Warehouse. Id.
Notwithstanding never having more than 1,000 copies of Book Three in her company’s inventory,
she successfully sold 12,250 copies to unsuspecting purchasers for $87,500 during a 1-year period
between December 2015 and December 2016. Id.
Agents recovered 881 copies of Book Three : 156 copies from a moving company that had
moved the books from Pugh’s legislative office; 21 copies from Afra Vance-White; 100 copies
from Tanya Bailey (another staff member); 502 copies from Pugh’s residence; and 100 copies
from BCPS school No. 215. Agents recovered 8,588 from the City Warehouse. Pugh dissipated
the remaining 2,531 copies of Book Three via giveaways.
3. False Promises to Print and Deliver Books
Based on discussions Pugh had with the CEO for BCPS in January 2011 and August 2012,
she knew that school administrators were not going to allow Books One and Two to be distributed
as part of the curriculum. Instead, BCPS agreed to include them with other take-home materials
for students because they lacked sufficient educational value. However, as the foregoing facts
show, Pugh and Brown quickly realized that the school system had not adopted a plan to
systematically distribute and account for the donated books stored at the City Warehouse. As
discussed above, they capitalized on that fact to execute the first two aspects of the scheme to
defraud, i.e., the resale and giveaway of thousands of donated books. Because of the first two
aspects of the scheme, agents found no copies of Books One or Two left at the City Warehouse
when they searched it in April 2019, and only 8,588 copies of Book Three.
8
Pugh did not need access to an inventory of books for the third aspect of her scheme. Like
other advance-fee scammers, she falsely promised to print and deliver books commensurate with
what purchasers paid her, and then simply kept their money. Pugh misrepresented her intention to
provide books to almost every major purchaser: MAIF, 2012 and 2013 (1,556 copies); the Trust
Fund, 2016 (4,500 copies); UMMS, 2016 and 2018 (40,000 copies); GCM and JPG, 2016
(approximately 30,000 copies); and Kaiser, 2015, 2017 and 2018 (6,510 copies).
A good example of Pugh’s intention not to fill an order was when UMMS paid her
$100,000 for a donation of 20,000 copies of Book Four to BCPS on October 17, 2016. Ex. 2.
Despite having received $100,000 (twice her legislative salary), Pugh never printed the 20,000
copies. Months later, Pugh sold 5,000 copies of Book Four to Kaiser for $25,000. Unlike with
UMMS, however, Pugh contacted the printer and ordered Kaiser’s 5,000 copies, which were
delivered on August 16, 2017, directly to Kaiser’s distribution center. Id. She also ordered an
additional 5,000 copies for herself, which were delivered to Pugh. Id. Remarkably, Pugh
deliberately chose not to use that opportunity to ask the printer to print the 20,000 copies of Book
Four that she still owed UMMS. Unlike Kaiser, which had its own distribution center, UMMS
had to rely on Pugh’s promise to ship the books directly to BCPS. Pugh exploited the fact that she
could get away with not printing UMMS’s copies but had to print Kaiser’s. In addition, about a
year later (September 12, 2018), she deliberately solicited and deposited another $100,000 from
UMMS for Book Five without fulfilling UMMS’s prior order for Book Four. Id. Ultimately, like
she did with the advance fees from other purchasers, Pugh spent most of the $200,000 without
printing either Book Four or Five for UMMS.
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Overall, Pugh’s personal inventory of Healthy Holly books never exceeded 8,216 copies.
Yet, after employing all three dimensions of her scheme, she was able to resell 132,116 copies for
a total of $859,960, and she dissipated another 34,846 copies via giveaways. 3
B. The Defendant Corruptly Solicited Funds from Purchasers Doing

Business with State and City Government
As a career politician, Pugh understood the importance of avoiding conflicts of interest
with companies and organizations that did business or sought to do business with State and City
government. The annual financial disclosure forms she filed while serving in office were a
constant reminder of the legal and ethical prohibitions against using her elected positions to engage
in self-dealing for personal gain. 4
Despite her awareness of the importance of avoiding even the appearance of a conflict of
interest, Pugh regularly pitched her Healthy Holly books to representatives of companies and
organizations that had ongoing or pending government contracts. For example, the Board of
Estimates for Baltimore City (“BOE”) is responsible for awarding contracts and overseeing all
purchases made by the City. The mayor is one of five voting members of the BOE. Therefore,
the mayor has substantial authority over the outcome of the bidding process. According to the
minutes of the BOE, both CareFirst and Kaiser were awarded multi-year, multi-million dollar
contracts to provide HMO and PPO medical plans for City government employees. Some of the
contracts were pending and awarded before Pugh took office, and some were awarded afterwards.
CareFirst and Kaiser currently provide HMO and PPO medical services to City employees.
3
It is difficult to assess the value of the dissipated books due to the lack of sales in the retail market. At the retail
price of $9 per book set by Pugh, the estimated loss due to dissipation would be $313,614. More conservatively, the
lowest price Pugh ever charged a purchaser was $5 per book, resulting in an estimated loss from dissipation of
$174,230.
4
Pugh signed and submitted financial disclosure statements annually to the Maryland State Ethics Commission
and/or the Baltimore City Ethics Board.
10
Similarly, the BOE regularly awarded GCM (J. P. Grant’s company) the Master Lease
Agreement for Baltimore City in order to finance the purchase or rental of equipment and
communications devices. GCM has been awarded the Master Lease Agreement since
approximately 2003, and the BOE voted again to award it to GCM as recently as 2018.
The BOE awarded Associated Black Charities hundreds of thousands of dollars to provide
an array of services, including serving as a fiscal agent for City workforce development grants and
HIV medical services. ABC currently serves as a fiscal agent to oversee the disbursement of grants
from the multi-million dollar Baltimore Children and Youth Fund.
The University of Maryland Medical System is one of the largest healthcare service
providers in Maryland. Healthcare legislation can have a significant impact on its business,
especially matters under consideration by the Health Subcommittee for the State Senate’s Finance
Committee. Pugh served as chairperson for that committee from 2013-16 while also serving as a
member of the Board of Directors for UMMS. UMMS is headquartered in Baltimore. UMMS
and related entities have been awarding funding by the BOE, such as $100,000 to UMMS’s Shock
Trauma Center to help fund a violence prevention program.
While there is no evidence that Pugh attempted to extort or solicit bribes from any of the
foregoing companies or organizations, the fact that she repeatedly and almost exclusively targeted
them suggests that Pugh leveraged the power of her elected office to corruptly solicit money from
companies and organizations that might be beholden to her. None of the purchasers knew about
her books until Pugh brought up the subject.
Corporate book purchasers with an interest in obtaining or maintaining a government
contract represented 93.6% of all Healthy Holly books or $805,000. To be clear, none of those
purchasers told investigators that they had purchased the books because they felt coerced or
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threatened by Pugh. Indeed, many of them readily agreed to buy the books because the theme of
the books supported the goals of their community outreach programs. Furthermore, as an African-
American female politician and author, some of the purchasers viewed Pugh as a role model to
communities the companies were trying to serve.
However, most of the purchasers candidly admitted that agreeing to buy books from a
politician like Pugh in an arms-length transaction was also a good business decision. Pugh was an
influential person who could play a role in awarding future contracts or vote on legislation that
could affect their businesses. Agreeing to buy books that matched their corporate missions made
more sense than dealing with the potential consequences of rejecting her solicitations. Many of
the purchasers acknowledged that they probably would not have purchased the books if Pugh had
not been the author. In other words, her political influence was a significant factor in their
decision. 5
C. The Defendant Deliberately Misused Her Publishing Business to Gain a

Political Advantage
Pugh’s pattern of publishing and marketing Healthy Holly books reflects a persistent and
focused effort to use her publishing business for corrupt purposes, including attempts to gain a
political advantage over other candidates and influence elections. What may have started as a
small side business in 2011, quickly became a source for illegal funds to supplement Pugh’s
lifestyle as an elected official and support her political ambitions.
For example, book sales closely tracked the various electoral cycles in which Pugh
participated. Primary and general elections for the Maryland State Senate took place on September
14, 2010 and November 2, 2010, respectively. It was around that same time that Pugh first
5
Many of the corporate purchasers and their employees also contributed to Pugh’s senatorial and mayoral
campaigns.
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approached UMMS and BCPS representatives about buying Book One. After conferring with the
parties, Pugh issued the first invoice to UMMS on December 21, 2010; the letter of agreement was
signed by UMMS on January 12, 2011; and two days later Pugh filed the Articles of Incorporation
for Healthy Holly, LLC.
By early 2011, Pugh had also decided to run for mayor of Baltimore in the fall of that year,
and Gary Brown joined her political campaign. Pugh ultimately lost the contested primary election
on September 13, 2011. However, in the months before the election, Pugh acquired $100,000
from UMMS for Book One, and she gained unfettered access to the 20,000 copies stored at the
City Warehouse. The books arrived at the warehouse on or about June 10, 2011, approximately
three months before the election. Before physically removing the books from the warehouse to
use as free promotional material, she tried to get school administrators to include the books with
other take-home materials for thousands of children of would-be voters, but that never happened.
Also around the time of the 2011 mayoral election, Pugh approached CareFirst, Grant
Capital Management and Associated Black Charities about buying and distributing copies of Book
One. CareFirst and GCM combined paid $21,000 for 3,000 copies, which, as noted above,
included the fraudulent resale of some of the books UMMS had purchased just months earlier.
Prior to winning the general election on November 2, 2014, which allowed Pugh to
maintain her State Senate seat, she acquired $100,000 from UMMS for Book Two and she began
using the 20,000 copies as if they were her own. Also leading up to that election, Pugh received a
total of $24,960 from various other purchasers for the fraudulent resale of 3,116 copies of Books
One and Two.
Pugh’s strategy to use her publishing business as cover for the scheme reached its peak in
years 2015 and 2016 when she ran for mayor a second time. She announced her candidacy in
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September 2015, and won the primary and general elections on April 26, 2016 and November 8,
2016, respectively. She took office on December 6, 2016. The fraudulent sales of Books Three
and Four to UMMS prior to that mayoral election provided Pugh with $200,000 from UMMS. In
addition, the ongoing double-selling of UMMS’s books at the City Warehouse provided another
$200,000, and the inventory of free giveaways increased by 20,000 copies with the delivery and
storage of Book Three on August 25, 2015, one month before she formally announced her
candidacy. In total, during the year preceding her candidacy and the subsequent year of active
campaigning, Pugh deposited $400,000 of illegal proceeds into Healthy Holly’s bank account and
oversaw the dissipation of thousands of donated books for her personal and political
aggrandizement. Setting aside for a moment the advantage she gained by funding the separate
straw donor scheme, the significant resources generated by the Healthy Holly scheme leading up
to the contested election unquestionably provided a huge financial advantage for Pugh.
The scheme’s financial impact on Pugh’s political advancement beginning in 2010 did not
end with her mayoral victory in 2016. Her new salary of approximately $184,000, which was
almost four times higher than her State Senate salary, was not enough to dissuade her from
continuing the scheme while occupying City Hall. In the two years following the mayoral election,
Pugh fraudulently sold UMMS, Kaiser, and the Frederick Frank Trust Fund a combined total of
31,000 copies of Books Three, Four, and Five for $189,000, copies that were never printed or
delivered, and she continued to deplete copies of the first three books stored at the City Warehouse.
D. The Misuse of Government Resources to Execute the Fraud
Integral to Pugh’s scheme to defraud was the misuse of valuable state and local government
resources. Information obtained from Pugh’s legislative and mayoral staff members, as well as a
review of Pugh’s and Brown’s emails and texts, show that Pugh used government employees to
14
conduct Healthy Holly business during work hours. Employees working at the Statehouse and
City Hall made phone calls and sent emails about the sale and delivery of books. They contacted
printing companies, discussed pending orders, sent invoices, and forwarded drafts of the books to
the illustrator.
Government vehicles driven by government employees transported books to events, and
Gary Brown made book deliveries during work hours. Pallets of boxes containing thousands of
books were stored at the City Warehouse over a seven-year period at no cost to Pugh or Healthy
Holly. Boxes of books used as giveaways were routinely stored at Pugh’s legislative offices in
Annapolis and Baltimore, and copies were on hand at City Hall. The use of these government-
owned resources to facilitate her crimes and grow her company’s bank account is particularly
disturbing.
In addition to the foregoing misappropriation of government resources, the diversion of
Pugh’s time and energy as a State Senator and Mayor was the biggest misuse of taxpayer’s money.
In effect, Pugh’s legislative and mayoral offices in Annapolis and Baltimore served as Healthy
Holly’s primary place of business. She used the stature of those offices to promote the books, and
she used the resources assigned to those offices to help manage and execute her for-profit business.
The time Pugh spent on the job machinating about how to profit financially and politically from
the Healthy Holly fraud was time not spent on executing the important duties of her offices. The
resulting cost from the damage done to the public’s trust through the corruption of her elected
positions is incalculable.
E. The Defendant Laundered Proceeds of the Scheme to Defraud

through her Publishing Business to Fund Straw Donations
to Her Mayoral Campaign
15
Healthy Holly, LLC, was not just a guise to generate illicit proceeds to maintain Pugh’s
lifestyle and support her political ambitions. As summarized in the Stipulation of Facts, Pugh also
used the business to launder some of those proceeds to secretly fund straw donations to the
Campaign to Elect Catherine Pugh. This is example of how Pugh’s deliberateness and long term
planning added yet another dimension to the Healthy Holly scam.
In late 2015, months before the all-important Democratic primary in April 2016, Pugh
conspired with Gary Brown to gain an unfair advantage over her fellow mayoral candidates. To
influence the outcome of the election, they decided to use Pugh’s money on deposit in Healthy
Holly’s business account to fraudulently inflate the amount of political contributions made to her
campaign. To that end, Pugh issued Healthy Holly checks to Brown, which he then converted into
untraceable cash to fund contributions in the names of straw donors, a violation of Maryland’s
election laws. Ex. 4 (Checks Issued to Brown). Between January and April 2016, Pugh and Brown
cashed out six Healthy Holly checks to fund at least eleven straw campaign contributions totaling
$35,800, each one a separate violation of state law. Ex. 5 (Summary of Straw Donations).
To backstop their plan and justify the issuance of the checks, Pugh and Brown concocted
the story that Brown was an independent contractor doing work for Healthy Holly. To bolster that
story and avoid scrutiny, they continued cashing out another $26,300 of Healthy Holly checks well
after the primary election. Ex. 4. Brown gave that cash back to Pugh, but she did not redeposit it
into the Healthy Holly account, which suggests the strong possibility that Pugh may have used that
cash to make more campaign contributions through other straw donors not known to Brown or to
reimburse contributions that had been made during the campaign. In total, at least $62,100 of
Healthy Holly deposits were used to fund or hide straw donations. Ex. 5.
16
F. The Solicitation of Illegal Campaign Contributions from a Book Purchaser
1. The $20,000 Check Payable to 2 Chic Boutique
In addition to using Healthy Holly to fund her campaign through straw donations as
described above, Pugh directly solicited illegal campaign contributions from one of the book
purchasers, J.P. Grant, the owner and CEO of Grant Capital Management. The solicitations took
place during 2016, the year of the mayoral election, contemporaneous with Pugh’s straw donor
scheme.
The first of three solicitations took place in late January 2016, about three months before
the primary election. Pugh asked Grant to meet her at a café a few blocks from 2 Chic Boutique
(“2 Chic”), a consignment shop for women’s clothing located on Washington Boulevard in
Baltimore. Pugh was the majority owner of that business, and her business partners were three
other women with ties to Baltimore City government.
Pugh told Grant that her mayoral campaign needed money and she wanted to know if Grant
could help. When Grant asked what she needed, she responded with a request for $20,000 without
denoting how she would spend it. Even though Grant had already contributed the maximum
amount of $6,000 to her campaign, he agreed to give the campaign another $20,000 knowing it
was a violation of state election laws. To conceal the contribution, Pugh asked Grant to write her
a check payable to “2 Chic Boutique.”
To conceal the transaction further, Grant decided to write the check from his wife’s
account, because it would draw less scrutiny coming from a woman. Grant presented the check to
his wife, Judy Grant, and she signed it without knowing its purpose. Ex. 6 (Judy Grant Check).
J.P. Grant delivered the check to Pugh at her senate office in Annapolis about a week or two later.
17
Similar to how Pugh used Healthy Holly funds and the company’s bank account to conceal
the source of the illicit proceeds to fund straw donations, Pugh laundered Grant’s $20,000 through
2 Chic to fund additional straw donations to the Committee to Elect Catherine Pugh. The check
was deposited into 2 Chic’s bank account at Harbor Bank on February 5, 2016, the same bank
where Healthy Holly had its business account. On February 25, 2016, two months before the
primary election, at 9:30 a.m., Pugh called a branch of Harbor Bank to authorize a $6,500 debit
from the 2 Chic account in order to fund a cashier’s check. Ex. 7 (Debit Slip); Ex. 8 (Desiree
Johnson Cashier’s Check). The cashier’s check was made payable to Gary Brown’s mother,
Desiree Johnson, who was waiting in the bank. Johnson immediately cashed it. It took fifteen
minutes from the time of Pugh’s phone call until the disbursement of cash.
Brown had accompanied his mother to the bank, but waited outside to get the cash. Pugh
and Gary Brown had already used Desiree Johnson as one of their straw donors a month earlier;
however, that $6,000 straw donation was funded through the Healthy Holly bank account. Because
that donation was the maximum for a personal campaign contribution, Johnson could not be used
a straw donor again. Consequently, Pugh directed Brown to bring her the $6,500 in cash that he
had just obtained from the 2 Chic account, and Brown complied. Brown delivered the money to
Pugh in an envelope with the understanding that Pugh herself would find a straw donor to make
the campaign contribution using the untraceable cash. The 2 Chic partnership spent the balance
of the original $20,000 on various business expenses.
2. The $50,000 Check Payable to Healthy Holly
The second solicitation for an illegal campaign contribution occurred on March 9, 2016,
about a month before the primary election. As more fully set forth in the Stipulation of Facts,
Pugh approached Grant for financial assistance for the campaign, but this time she couched the
18
request in terms of a philanthropic request to donate her books to Baltimore school children. ECF
No. 12, Att. A at 13-14. Pugh described how she had made money by selling her Healthy Holly
books to various organizations like UMMS, who in turn donated the books to the students. Id.
Grant understood that Pugh would use the net profit of the sale to help her campaign. Id. Pugh
asked Grant to purchase $50,000 worth of books, which he agreed to do. At Pugh’s request, on
March 7, 2016, Grant issued a personal check for that amount payable to Healthy Holly, LLC. Ex.
9 (J. P. Grant Check). Gary Brown picked up the check from Grant’s house at Pugh’s direction.
Pugh spent $19,800 of those funds on straw donations through Gary Brown; $6,000 for a
contribution in her own name; and $10,000 was transferred to the account of the Committee to
Elect Catherine Pugh.
3. The $100,000 Check Payable to Healthy Holly
The third request for money from Grant occurred in October 2016, about a month before
the general election. ECF No. 12, Att. A at 14. Anticipating her mayoral victory, Pugh asked
Grant for money to help her buy a larger house befitting a mayor. Id. Pugh suggested that Grant
help her by making a book donation like he had done back in March of that year, which Grant
again understood to mean that Pugh would use the net profit from the book sale to help pay for the
house. Pugh did not disclose the fact that she never used any of those funds Grant provided in
March to print or deliver books for Baltimore schoolchildren. At Pugh’s request, on October 13,
2016, Grant issued a company check payable to Healthy Holly with the notation “book donation.”
Ex. 10 (GCM Check). Like in March, Pugh did not use any of those funds to print or deliver
books, but rather, spent it all on personal expenses including the purchase of a new house.
The criminality of the first two requests is clear. The third request is tantamount to a
solicitation of an illegal campaign contribution in violation of state law, because Pugh was a
19
candidate actively running for office who solicited undeclared money from a registered donor.
The money was to help her financially during her candidacy, and she concealed that contribution
within an unrelated book transaction.
In sum, Pugh was determined to do whatever was necessary to gain an unfair advantage
over her mayoral rivals, including using a federal wire fraud scheme to facilitate repeated
violations of state election laws. To that end, she deployed $61,200 of illicit funds on deposit in
her Healthy Holly account to fund and hide the straw donor scheme. Concurrently, she solicited
approximately $170,000 in campaign contributions directly from Grant and his company using
Healthy Holly and 2 Chic Boutique as cover. 6 In total, believing campaign finance laws did not
apply to her, she used the $231,200 in an attempt to influence the outcome of the mayoral election
and buy a house suitable to that office, the majority of which were proceeds from the Healthy
Holly scam.
G. The Fraud Perpetrated upon the IRS was Also Longstanding

and Sophisticated
1. Hiding the Income Generated by Healthy Holly Sales in 2015 and 2016
The parties have stipulated that an upward adjustment for sophisticated means is warranted,
not only for the execution of the Healthy Holly scheme, but also for the scheme to defraud the IRS
and the evasion of taxes in 2015 and 2016. However, the facts underlying the reason for the
upward adjustment go well beyond the bare minimum needed under the law for the adjustment to
apply. The scope and duration of Pugh’s evasive intent began well before 2015 and 2016, and the
steps she took to conceal it are particularly egregious.
6
As previously noted, Grant understood that the net profit of the book purchase would go to Pugh’s campaign and
subsidize the purchase of a new house. Assuming the same $5 per book price paid by UMMS, Grant purchased
30,000 books. The average total cost per book to print/produce Books One through Four was $.94 per book. At that
cost, the net profit available to benefit Pugh’s campaign had she printed the 30,000 copies would have been
approximately $121,800.
20
As summarized more fully in the Stipulation of Facts, Pugh created an elaborate pretense
of a business relationship between Healthy Holly and Gary Brown’s company’s, GBJ Consulting.
ECF No. 12, Att. A at 15-17. From Pugh’s perspective, the pretense was necessary to deflect
scrutiny from the Maryland Election Commission and law enforcement authorities lest they
discover not only the straw donor scheme, but also the Healthy Holly scheme that she and Brown
had been executing for half a decade. If believed, the fiction of GBJ as an independent contractor
for Healthy Holly would fully explain the series of checks written to Gary Brown during the
mayoral election cycle.
To backstop everything, Pugh and Brown devised and maintained numerous bogus
documents to give the false impression that they had been created during the course of a legitimate
business relationship, including the following: an independent contractor agreement; business
ledger; and backdated consulting invoices. Ex. 11 (Agreement); Ex. 12 (Ledger); Ex. 13
(Invoices). They extended the ruse to their 2016 tax filings, which included phony information
that overstated expenses and concealed the true purpose of the Healthy Holly checks. The
contrivance reflects Pugh’s business acumen and misplaced ingenuity.
To bolster the false filings and make them match each other, Pugh and Brown synchronized
the fictitious information on Schedule C forms for their respective businesses that were filed with
their individual income tax returns. For example, the purported fees paid to Gary Brown as listed
on the 1099 and Schedule C filed by Healthy Holly aligned with what Gary Brown listed as income
received by GBJ Consulting. They also lined up with the made-up business records. Such
meticulous attention to detail to cover her tracks, including fabricating convincing business records
and synchronizing multiple federal filings, speaks to Pugh’s mendacity and her committed
indifference to the rule of law in order to get ahead financially and politically.
21
2. Filing a False Tax Return for 2012
Just like the Healthy Holly scheme, Pugh’s plan to evade taxes did not happen overnight.
It evolved over a course of years, starting with the filing of her tax return for 2012, which she did
not file until 2015. 7 That year, she received a $100,000 payment from UMMS for Book Two.
While she reported the payment as income on Healthy Holly’s Schedule C, she deliberately
concocted fictitious business expenses to offset that income and reduce the amount of taxes owed.
Like her filings in 2015 and 2016 (which she filed in 2016 and 2018, respectively), those expenses
grossly overstated her deductible expenses.
More specifically, she claimed $75,879 as deductible expenses against the $100,000
payment when, in fact, the business only had a total of $16,032 of legitimate expenses. Pugh
brazenly overstated her expenses by $59,847, which greatly reduced the taxes she owed that year.
It is noteworthy that Pugh filed Maryland state tax returns in Years 2012, 2015 and 2016
knowing that they were largely based on the false calculations of adjusted gross income in her
federal tax returns for those same years. In total, Pugh swore under the penalties perjury to the
accuracy of six different tax returns filed on six different occasions over a four-year period, which
is further evidence of her mendacity and indifference to the law.
3. Filing of a False Tax Return for 2 Chic Boutique in 2016
In 2016, 2 Chic Boutique LLC, filed IRS Form 1065, U.S. Return of Partnership Income,
which listed Pugh as the majority owner at 54%. Despite receiving the aforementioned $20,000
deposit from Judy and J. P. Grant, and despite spending all of it by year’s end, the 2 Chic partners,
including Pugh as the majority owner, did not report the receipt of the $20,000 as income.
7
The evasive conduct discussed here was not charged in the Indictment because it took place outside the statute of
limitations.
22
It is unlikely that the failure to declare the receipt and use of that money was an oversight,
because it represented almost 80% of the company’s receipts for that year. The deposit was by far
the largest in the small company’s history, and the company would have only survived a few more
months without the benefit of that deposit. The 2 Chic bank account only had a balance of $961.78
when the $20,000.00 was deposited, bringing the account balance to $20,961.78 on February 5th,
2016. The money was used to pay expenses of the businesses, such as electric, cable, consignor
payments, rent, etc., as well as the $6,500 cashier’s check given to Desiree Johnson as noted above.
There were no further significant deposits that year. In fact, the 2 Chic bank account had a negative
balance of $301.54 nine months later on November 28, 2016.
On the business’s 2016 tax return, the partners reported gross receipts of only $6,412, less
cost of goods sold of $2,635, resulting in total reported income of $3,777. Against that income,
they deducted the expenses paid with the $20,000 check as described above, which totaled
$19,315. By not reporting the deposit of the Grant check, the $19,315 of total deductions gave the
partnership an ordinary business loss of $15,538, which the partners shared, resulting in a possible
reduction of taxable income on each of their individual tax returns.
If the $20,000.00 check had been reported, the 2 Chic business loss of $15,538 would
have been a business gain of $4,462. This would have been the first and only year that 2 Chic
made a profit, and it would have been distributed to the partners. In short, Pugh and her partners
reported the expenses paid with the $20,000 deposit because it lowered their tax liability, but
chose not to report the receipt of the $20,000 because it would have increased their tax liability.
Given the history of Pugh’s tax evasion as chronicled above, the solicitation and
expenditure of Grant’s campaign donation is another example of her deceit and indifference to the
law when it serves her financial and political ends.
23
H. The Use of a Philanthropic Message to Defraud
The evidence overwhelmingly established Pugh’s ongoing intent to deceive, a fact
common to all four counts of the Indictment to which she pled guilty. The deception and
misrepresentations employed by Pugh to convince organizations to purchase her books relied
heavily on the notion that the book was part of a broader effort being led by Pugh to solve
children’s health issues. In her capacity as a legislator and political candidate, she spoke at civic
events and government affairs about a “shared mission” and creating “partnerships” in order to
increase healthy habits among children, especially inner-city schoolchildren. At some of these
events, she spoke one-on-one with potential book purchasers to tout the value of her books in this
effort and passed out free copies. It was a deliberate attempt to promote the sales of her books
while engaging in political and government networking. The books were simultaneously her
personal, professional, and political calling cards. As such, staff members always made sure there
was a box of Healthy Holly books at every event.
Whatever sincere beliefs Pugh may have had about improving children’s health, one thing
is clear: she deliberately capitalized on this theme for years to mislead organizations about the
true purpose behind buying and “donating” her books to the cause. Based on conversations with
Pugh about how the books could help reduce childhood obesity and to whom she planned to
distribute them, some book purchasers were led to believe that Healthy Holly was a non-profit
enterprise that had aligned itself with BCPS. Nothing Pugh told them remotely suggested that she
was personally profiting from the sale and donations of the books, a material fact that would have
prompted them to question their participation in the venture. Nor did they have a clue that they
were buying stolen goods. Pugh’s decision to collaborate with Associated Black Charities
24
(“ABC”) also contributed to the pretense that Pugh was spearheading a philanthropic project, as
opposed to her personally getting 80% to 100% profit on the sale of each book.
One purchaser, the Frederick Frank Trust, had turned down Pugh’s sales pitch only to
discover later that their $50,000 donation to ABC was used to purchase 5,000 copies of Book
Three. As it turned out, when Pugh learned that the Trust was about to donate the money to ABC,
she called ABC and falsely represented that the Trust wanted their donation to be used to purchase
her book. Not knowing any different, in December 2016, ABC applied the donation to the book
purchase and sent Pugh $45,000.
The Trust only learned about the fraud when they saw a letter from ABC to Pugh asking
her to confirm that she had used the money to purchase and deliver the books to a youth-related
program. Pugh had the gall to have Gary Brown respond by letter falsely stating that the books
would be purchased and delivered to BCPS children. Ex. 14 (Letter to ABC). By that time, as
Pugh well knew, UMMS’s copies of Book Three (the only ones in existence) had already been
stored at the BCPS warehouse and were fraudulently being resold and used as giveaways. In any
event, Pugh never printed or delivered any books on behalf of the Trust.
I. The Cover-Up
1. Pugh Paid for Gary Brown’s Lawyers to Keep Him Quiet
Pugh’s contempt for the law was also evident in the various ways she attempted to hide her
criminal misdeeds. In addition to the creation of fraudulent documents to conceal the true purpose
of the Healthy Checks issued to Gary Brown, Pugh successfully convinced Brown not to assist
state officials who were investigating the straw donor scheme in January 2017. When the Office
of the State Prosecutor charged Brown with election law violations, Pugh’s campaign decided to
25
return some of the contributions made by the alleged straw donors, which totaled $18,000. 8 The
straw donors cashed the returned checks and gave the cash to Brown who, in turn, tried to give the
money back to Pugh.
Pugh had served as Brown’s political mentor for years. Just before the straw donor scheme
became public, she helped orchestrate his nomination to fill the vacant seat in the Maryland House
of Delegates created by her mayoral victory. To protect herself from prosecution, Pugh gave
Brown the $18,000 in returned contributions and urged to him to hire an attorney she identified as
someone who will “take care” of him. Brown took Pugh’s advice, hired the attorney and ultimately
pled guilty in state court without providing any information to the authorities about Pugh’s role in
the scheme or the use of Healthy Holly funds.
To protect her longtime co-conspirator further, Pugh made self-serving statements and
even lied to the press during the course of his prosecution, all the while keeping Brown employed
at City Hall, even after his conviction. In response to Brown’s indictment, Pugh stated that she
was “saddened by the allegations . . . [but] Mr. Brown is presumed innocent while the
investigations continue. I have a mechanism in place to make sure that everything is done properly.
We'll go back through the process, and make sure that every 'i' is dotted and 't' is crossed." 9
At a press conference on January 11, 2017, the day Brown was charged, Pugh characterized
the straw donations that she and Brown orchestrated as simply a “glitch,” and further stated, “We
know that things happen when we raise over $2 million . . . If there is anything wrong with the
8
The campaign only returned $18,000 of the total $35,800 in straw donations because the state’s investigation did
not identify all the other straw donors, including the use of some of Pugh’s relatives.
9
Luke Broadwater, Gary Brown, aide to Baltimore Mayor Pugh, charged with making illegal campaign
contributions, The Baltimore Sun, January 11, 2017, https://www.baltimoresun.com/maryland/baltimore-city/bs-md-
ci-gary-brown-20170109-story.html.
26
funds that we received, we will go back [and return checks].” 10 When asked if she knew where
the money for the straw donations came from, Pugh outright lied: “No. I didn’t handle the funds.
That’s not my job.” 11
On May 31, 2017, after Brown’s conviction, in an attempt to further deflect attention from
herself, Pugh said she would continue to stand by him. 12 Feigning ignorance and a lack of concern
about her own complicity, she also said that she had not bothered to look into the source of the
funds for the illegal campaign contributions. 13 She said, “As far as I’m concerned, - I have not
read the transcripts, I don’t know all of the particulars, I wasn’t in court but – the Gary Brown that
I know has been a good employee for years.” 14 When asked directly if she had looked into the
source of the funds for the donations, she responded, “No, I have not,” and when asked if she still
stood by Brown, she responded emphatically, “Oh, I do.” 15 And in another brazen lie, Pugh told
reporters, “Well, as far as I know, the campaign complied with election laws.” 16
2. Orchestrated Lies to the Public
a. Statements to the Press
In early March 2019, the news media started to report about the potential conflict of interest
created by UMMS entering into a no-bid book deal with Pugh, a member of the UMMS Board of
Directors. On March 14, 2019, Pugh gave a statement to the press to downplay the matter. Using
the same lofty language she used in her sales pitches, Pugh talked about how her books “educate,
10
Fern Shen, Pugh praises aide charged with making illegal campaign donations, Baltimore Brew, January 11,
2017, https://baltimorebrew.com/2017/01/11/pugh-praises-aide-charged-with-making-illegal-campaign-donations.
11
Id.
12
Yvonne Wenger, Mayor Pugh calls aide found guilty of election violation 'a good employee,' stands by him, The
Baltimore Sun, May 31, 2017, https://www.baltimoresun.com/maryland/baltimore-city/bs-md-ci-pugh-gary-brown-
20170531-story.html.
13
Id.
14
Id.
15
Id.
16
Id
27
elevate and inspire our young people to be the best they can be and achieve their full potential.”17
She then lied about the net profit she earned from each book transaction stating, “The net profit to
my company after illustration, printing and shipping costs amounted to approximately $20,000”
for each book UMMS purchased. 18 In fact, Pugh’s net profit per book sold to UMMS was
approximately $81,000, four times higher than she claimed, not to mention the money she received
from fraudulently reselling them and their value as promotional giveaways.
During a phone interview on March 20, 2019, Pugh used numerous falsehoods to try to
quell the story. She said, “All my income is reported to the IRS and everything is filed . . . I don’t
know what witch hunt y’all are on, but it’s done. I’ve got 1099s and I pay my taxes and everything
is filed.” 19 In another brazen lie, Pugh told the reporter that she had not “sold her Healthy Holly
books beyond those she provided for the UMMS deal . . . [and] most of the books had gone to
schools and day care centers.” 20 She noted how “Healthy Holly is not a book company . . . [but
rather] a company promoting healthy lifestyles for children.” 21
With increasing calls for her to resign, Pugh held a press conference at City Hall on March
28, 2019. Employing her educational and business background in marketing and public relations,
the staged rebuttal sought to shift the spotlight away from growing reports about thousands of
books gone missing by highlighting Pugh’s virtuous concern for children’s health issues. Pugh
described the book deal with UMMS as a “shared mission” to reduce childhood obesity, and she
displayed Healthy Holly baby accessories, including bibs and blankets, to emphasize her plans to
17
Luke Broadwater, Baltimore Mayor Pugh: $100,000 book deal with University of Maryland Medical System was
aboveboard, The Baltimore Sun, March 14, 2019, https://www.baltimoresun.com/politics/bs-md-pugh-statement-
20190314-story.html.
18
Id.
19
Kevin Rector & Doug Donovan, Baltimore Mayor Pugh says she paid taxes on book sales, calls inquiries a 'witch
hunt,' The Baltimore Sun, March 20, 2019, https://www.baltimoresun.com/maryland/baltimore-city/bs-md-ci-pugh-
on-books-20190320-story.html
20
Id.
21
Id.
28
spread the message through such merchandising. 22 Ex. 15 at 1 (Transcript of Press Conference).
Pugh handed out paperwork proving that Books One through Three had been printed, so she had
not absconded with the money. She planned to make “arrangements to retrieve” the remaining
books still at the City Warehouse “to make them available to our children in our community.”23
Id. at 3. Remarkably, as the press conference ended, Pugh feigned deep concern about the
whereabouts of the rest of UMMS’s books stating, “I do hope that we find out from the school
system where the rest of the books are.” 24 Id. at 4.
The foregoing statements to her constituents and the public at large was a blatant attempt
to beguile the press and cover her tracks, especially the press conference. It was a public relations
ploy steeped in lofty language about empowering children; the same theme she used to promote
her books and close a sale. The transparent attempt to change the narrative and deflect further
scrutiny was devoid of honest contrition.
b. False Statements on Financial Disclosure Forms
As a State Senator representing the 40th District, Pugh was required to file under oath an
annual financial disclosure statement with the Maryland Ethics Commission to disclose her
financial affairs, including all interests in any corporations. On the statements filed for years 2011
– 2016, Pugh disclosed her ownership in Catherine E. Pugh & Co. and 2 Chic Boutique, LLC.
However, despite making hundreds of thousands of dollars from Healthy Holly, LLC, during those
same years, Pugh chose not to disclose her ownership interest in the company. The decision not
to acknowledge the existence of Healthy Holly for six straight years is further evidence of Pugh’s
22
Ian Duncan & Doug Donovan, Baltimore Mayor Pugh apologizes for 'Healthy Holly' deal but admits some books
being delivered only now, The Baltimore Sun, March 28, 2019, https://www.baltimoresun.com/politics/bs-md-ci-
pugh-press-conference-20190328-story.html.
23
Id.
24
Id.
29
measured approach to executing and concealing her scheme to defraud to insure its profitability
during a key period in her political life.
3. Pugh’s Attempt to Prevent the Seizure of Her Cell Phone
On April 25, 2019, FBI and IRS agents executed a federal search warrant at Pugh’s
residence. They also had a search warrant to seize and search her personal Samsung cell phone.
The agents knocked on the door and Pugh let them in. She was the only person in the house.
The agents explained why they were there, and they asked to see her cell phone. Pugh took
the agents upstairs to her master bedroom where she retrieved a red cell phone that she identified
as her personal cell phone. The agents seized the phone.
Upon closer inspection, the agents learned that the red phone was not her persona phone,
but rather, a City-issued iPhone. When the agents explained that the warrant was for her personal
“Samsung” cell phone, Pugh said she did not have it. She told the agents that she had given the
Samsung phone to her sister when she was in Philadelphia. An agent advised Pugh that he was
going to place a call to the Samsung phone. He then dialed the phone number assigned to the
Samsung.
Almost immediately, the agents heard a vibrating noise emanating from her bed. Pugh
became emotional, went to the bed and began frantically searching through the blankets at the head
of the bed. As she did so, agents starting yelling for her to stop and show her hands. One of the
agents grabbed her left shoulder and pulled her away from the bed. As he did so, agents could see
that her left hand was empty. However, in her right hand, the one she removed from under the bed
pillow, was the Samsung personal cell phone, which was still vibrating from the call the agent had
just placed. The agents took custody of the phone.
30
A short while later, Pugh acknowledged she had lied to the agents about the whereabouts
of her phone. Pugh’s lie and futile attempt to silence the phone to prevent its seizure is indicative
of her lack of respect for the law and, more broadly, her past efforts to hide longstanding criminal
misconduct.
IV. Sentencing Recommendation
The chronology of events since 2011, comprising Pugh’s seven-year scheme to defraud,
multiple years of tax evasion, election fraud, and attempted cover-ups, including brazen lies to the
public, clearly establishes the deliberateness with which she pursued financial and political gain
without a second thought about how it was harming the public’s trust. It was not rash behavior.
Rather, it was a recurring pattern of well-executed steps that built on each other, becoming more
audacious and complex leading up to the mayoral election.
As an educated businesswoman and successful politician, Pugh had countless opportunities
for self-reflection, occasions when she could have checked her moral and ethical compass and
chosen to change course. She did the opposite, and chose to double down on a path of rampant
criminal deception to fulfill her ambitions.
From the very start, Pugh quickly realized that there was no need to print more than a
negligible number of books for herself because the scheme to defraud worked. The recurring
misrepresentations to UMMS that their book donations helped a worthy cause provided all the
books Pugh would ever need to supplement her legislator’s salary and give her the political edge
she was looking for. No one ever questioned her integrity or the source of the books. After all,
she was a former city council woman, state delegate, state senator, and rising political star. No
one would ever suspect that a person of her stature was selling stolen books, much less books that
had been donated to schoolchildren. She took advantage of this by specifically seeking out
31
potential buyers who might benefit financially if Pugh was politically successful, thus corruptly
leveraging her political title and government office.
The worthy theme and message of the books, and Pugh’s professed motive for selling them,
overcame whatever hesitation a purchaser may have felt. The problem of childhood obesity
perfected Pugh’s deception. During her sales pitches, she virtuously exhorted the books as part of
the solution to childhood malnourishment and poor health. Passing out free copies to potential
voters and their children helped cement her claim as the candidate of change. If Pugh ever truly
believed that to be the case, the money and power she gained from years of fraudulent sales and
deceptive tactics corrupted that ideal and replaced it with a depraved notion of what public service
means.
Pugh’s criminal conduct was extremely unfair to the hard working government employees,
civic activists, and religious leaders who tried to find a foothold in what seemed like an avalanche
of bad news about the City, including entrenched crime rates. Dedicated people worked side by
side to communicate a message of hope that might spark a much-needed renaissance for the City,
the economic engine of the State.
Unfortunately, Pugh’s conduct unquestionably added to the City’s problems. The financial
consequences from the negative national attention, and the enormous costs to the City in time,
resources, and manpower in order to deal with her sudden absence, are quite significant. But the
greatest harm is the damage done to the public’s trust and faith in its government. As in all public
corruption cases when an elected leader’s criminal conduct while in office is exposed, the biggest
victim here is not the book purchasers, the Department of Treasury or the Maryland State Board
of Elections. Rather, it is the citizens of Baltimore and the State of Maryland whose faith and trust
in government has been breached.
32
The Court’s statutorily prescribed role at sentencing is not only to see that justice is served
but to serve as a bulwark against future corruption by imposing a sentence that will deter other
would-be corrupt politicians, fraudsters, and tax evaders from taking advantage of the public. A
reasonable sentence in this case is one that holds Pugh accountable for her years of continuous
criminal activity and helps restore the public’s trust in government. Consistent with Guideline
sentencing principles and the factors under § 3553, a sentence of 57 months imprisonment
reinforces the notion that serious criminal acts committed by high-level elected officials while in
office will be fairly and adequately addressed. A sentence of 57 months incarceration is the
appropriate sentence in this case.
Respectfully submitted,
Robert K. Hur
United States Attorney
By: _________/s/__________________
Martin J. Clarke
Leo J. Wise
Assistant United States Attorneys
Office of the United States Attorney
District of Maryland
33
CERTIFICATE OF SERVICE
This is to certify that on this 13th day of February 2020, a copy of the foregoing
Government=s Sentencing Memorandum was electronically filed and made available to counsel
of record.
_________/s/_________________
Martin J. Clarke
Assistant United States Attorney
34
,:
J.
Case 1:19-cr-00541-DKC Document 17-1 Filed 02/13/20 Page 1 of 3

HHCOMPANY OVERVlEW.docx <extracted>
Sources of Capital
lnvestment Requirement
1,255,000.00
Marketing and Public Relations Stso,ooo
Material Production
Books: Steo,ooo
Jump Ropes: 100,000
Pajamas 100,000
Tee Shirts 200,000
Staff 225,000
Consulting Services 90,000
Office Exp 120,000
st,o65.0o
Profit and Loss Proiections (3-Yearsl
Page 650 of 865
EXHIBIT 1
HHCOMPANY OVERVIEW.docx <extracted>
)
Revenues Year 1 Year 2 Year 3
Books 1,500,000 1,75o,ooo 2,ooo,ooo
Products:
Jump Ropes 250,000 300,000 350,000
Other Products 250,000 300,000
lnfant wear 140,000 180,000 210,000
Tee Shirts 400,000 480,000 600,000
Total Revenue 2,2gA,o0o 2,955,000 3,460.000
Product Expenses 850.000 895,000
Staff 250,000 300,000

)
Office Expense L44,000 168,000
Consulting Services 90,000 100,000 120,000
Marketing and Promotions 120,000 150,000 180,000
Other Expenses 20,000 24,000 30,000
Total Expenses 230,000 L,5l_8,000 L,693,000
Net Profit Before Taxes 2,060,000 L,437,000 1,,767,000
Taxes(10%) 206,000 L43,700 169,300
Profit After Taxes l_,854,000 t,293,300 1,597,7O0
CASH FLOW
Page 651 of 865

HHCOMPANY OVERVIEW.docx <extracted>
Cash Flow
Cash lnvestment S1,2ooo,ooo
Start Up Cost -1,065,000
Cash Flow 135,000
Net Profit after taxes (Year One) 1,854.000
Year One End Cash Flow 1,989,000
Year End Two Net Profit t,283,3O0
Year End Two Cash Flow 3,272,300
Year End Three Net Profit L,5g7,7OO
Year End Three Cash Flow S4,870,ooo
Page 652 of 865

Healthy Holly
Summary of Books Sold
Quantity of Books
Printing Books Book One: BookTwo: BookThreel Book Four;
Date Company Shipped To Exercisinq Herbie Fruits Vegetdbles Total
6/LO/2011 Kromar 2901 Druid Park Dr 2,090 2,090
6/7012077 Kromar 200 E North Ave 20,o20 20,o20
3/L9l2OL3 Kromar 2901 Druid Park Dr 1,500 1,500
3/28/2oL3 Kromar 200 E North Ave 18.600 18,600
8/2s/201s Kromar 2901 Druid Park Dr 1,500 1,s00
8/2s/20Ls Kromar 200 E North Ave 19,500 19,500
8/t6/2017 Premier 2901 Druid Park Dr 5,006 5,006
8lt8/20L7 Premier Art & Negative Graphics 5,016 5,016
Total 22,110 20,100 21,000 1.O,O22 73,232
Quantity of Books Sold

lnvoice BookOne; BookTwo: BookThreel Book Four: Book Five: Unknown Amount Paid Price per Books Credit
Date Entity / Person Exercising Herbie Fruits Vegetables Walking Edition Total for Books Book Delivered Amount
7/zOtO UMMS 10,000 10,000 s s0,000.00 s s.oo
3/tl2o7r UMMS 10,000 10,000 s 50,000.00 S s.oo
LO/6/2OLL Grant Capital Management 2,000 2,000 s 14,000.00 S 7.oo 2,000 5 14,000.00
to/7/20tt Carefirst 1,000 1,000 s 7,000.00 s 7.oo 1,000 s 7,000.00
2l28l2Or2 Women Legislators of MD 110 110 s 880.00 S s.oo 110 s 880.00
2128/2Ot2 St. Mary's Ladies Auxiliary 50 s0 5 400.00 S 8.oo so s 4oo.oo
81212072 MAIF 1,000 1,000 s 7,s00.00 S 7.so
8/22/20L2 UMMS 20,000 20,000 s 100,000.00 s s.oo
s/3012ot3 MAIF 556 ss6 s s,000.00 s 8.ee
LO/4/2073 Ariel Investments 200 zoo 400 s 3,680.00 s e.2o 400 S 3,680.00
7213/2073 Carefirst 1,000 1,000 s 7,s00.00 s 7.s0 1,000 S 7,soo.oo
tl24l21rs UMMS 20,000 20,000 s 100,000.00 s s.oo
t2/22lz1]5 Kaiser Permanente 990 1,000 2,500 510 s,000 s 2s,000.00 S s.oo 4,490 S 22,4so.oo (a)
3/s/2076 James P Grant TBD TBD s s0,000.00 TBD
6/27120L6 Kaiser Permanente 5,000 s,000 s 2s,000.00 s s.oo 5,000 S 2s,000.00 (a)
to/77/2076 UMMS 20,000 20,000 s 100,000.00 S s.oo
7O177/2076 Grant Capital Management TBD TBD 5 100,000.00 TBD
L2/22/2076 Frederick Frank Trust 5,000 s,000 s s0.000.00 s 10.00 5oo s s,000.00
4/sl2oL7 Kaiser Permanente s,000 5,000 s 25,000.00 S s.oo s,000 s 2s,000.00 (b)
ro/3t/2017 Kaiser Permanente 2,000 2,000 s 14,000.00 s 7.00
sl72/2078 UMMS 20,000 20,000 s 100,000.00 s s.oo
to/27/2078 Kaiser Permanente 4,000 4,000 s 2s,000.00 s 6.2s
Sub-totals 24,350 23,756 32,5OO 27,OOO 24,000 s10 L32,tt6 s 8s9,960.00 19,ss0 s 110,910.00
Less: Books Shipped directly to Kaiser (s,000) (s,000) S s.oo s (2s,000.00) (b)
Totaf 24,350 23,756 32,500 22,OOO 24,000 510 L27,LL6 s 8s,910.00
EXHIBIT 2
Notes:
(a) The invoices issued to Kaiser do not specify the edition of the books sold. However, based on records provided by Art & Negative Graphics,
Kaiser received 990 copies of Book One, 1,000 copies of Book Two, and 7,500 copies of Book Three.
(b) These books were shipped directly from Premier Printing to Art & Negative Graphics, the warehouse for Kaiser, therefore these were credited.
et
Healthy HollY
Summary of Disposition of Books Printed for Others
Quantity of Books
Book One: BookTwo: BookThree: Book Four:
Fxercising Herbie Fruits Vegetables Total
Books Printed for Others 20,000 20,000 20,000 5,000 55,000
Books Sold & Delivered (excluding UMMS) (2,350) (2,20O) (8,000) (5,000) (17,550)
Books Located other than Warehouse (1,742). (1,393) (881) (4,016)
Books Located at BCPS Warehouse (8,588) (8,588)
Total Giveaways 15,908 L6,407 2,531. 34,846
EXHIBIT 3
EXHIBIT 4
Healthy Holly Checks to cary Brown - Disposition Analysis

For the Period January 1, 2015 through December 31, 2015
Healthy Holly Cashed

Checks to Gary Brown cash Deposits into Committee to Elect CP Contributions
Date Amount Date Account Holder Amount Date Type From Amount
L/t7/2076 3,02s 7/1,U2O|G Cash for Money Order 1,000 7/77/2016 Money Order James Crump 1,000
!fL/2O16 Cash for Money Order 1,000 7lfU2O76 Money Order Ardell Crump 1,000
7/7U2016 Cash for Money Order 1,000 7/7U201"6 Money Order Addie Jackson 1,000
Totals 3,025 3,000 ___949q
ut3/2076 6,000 U13/2076 Desiree Johnson 6,000 7/14/201,6 Check #374 Desiree lohnson 6,000
L/t3/2076 6,000 7173/20L6 SamuelJohnson & Desiree Johnson 3,000 7/ 15/2076 Checkcard Charge samuellohnson 3,000
7/73|2OLG Danny Brown 3,000 7h9/2076 Checkcard Charse Danny Brown 3,000
Totals 12,000 t2,oo0 12,000
2/t2/2016 2sO TBD TBD

2/29/2016 7,sOO TBD TBD
3/9120!6 7O,OOO 3/9/2015 Samuel lohnson & Desiree lohnson 3,000 3l 17/2076 Checkcard Charge Samuellohnson 3,000
3/9/2016 Ronald Shannon 2,000 3/9/2015 credit card charge Ronald Shannon 2,000
3/74/2016 Shear Hunter Hair Boutique 2,OOO 3/74/2076 check #1018 Shear Hunter Hair Boutique 2,OOO
3/74/2076 Williams and Hunter services, lnc. 4,000 3/74/2076 Check $9001 Williams and Hunter Services lnc. 4,000
Totals 10,000 11,000 11^0OO
4/7712016 9,800 4hL/2016 Danny Brown 3,000 4/72/2076 Check #1078 Danny Brown 3,000
417212016 Tanya Bailey 1,500 4/11/2076 Check f2533 Tanya Bailey 1,500
4172/2OL6 Raishawn Hebron 3,000 4/75/2016 Check #148 Raishawn Hebron 3,000
4/7u2076 .lohn Clark 1,000 4177/2076 Check #2420 John clark 1,000
4/71/2076 Denise Deleaver 1,300 4/72/2016 Check #586 Denise Deleaver 1,300
Totals 9,800 9,800 9,800
6/22/2016 400 TBD TBD

7l2s/2076 125 TBD TBD
s /22/2016 2,OOO TBD TBD
rc/19/201,6 10,000 TBD TBD
72/2312076 7,OOO TBD TBD
Grand Totals 62,100 35,800 35,800
EXHIBIT 5
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EXHIBIT 10
https://ipcws.fiserv.com/cws.web/HTMLReport.aspx?is_popup=1&is_popup2=1&is_popu... 4/10/2017
- Healthy Holly LLC

3603 Dennlyn Rd.
email-cepug!tco@aol.com
th
TIDS AGREEMENT for Contractor Services ("Agreement") is made this _15 _ day of
_September _ 2014; by and between Healthy Holly LLC (hereinafter referred to as "Client"),
3603 Dennlyn Rd., Baltimore, Md. 21215 and GB Abstracting & Consulting, LLC (hereinafter
referred to as "Consultant") located at 2118 Clifton Ave., Baltimore, Md. 21217.
WHEREAS, CLIENT desires to enter into an Independent Contractor Agreement with

Consultant, and Consultant desires to enter into an Independent Contractor Agreement with
CLIENT, on the terms and conditions hereinafter specified;
1. Relationship. CLIENT hereby retains Consultant, and Consultant hereby agrees to be

retained by CLIENT, as an independent contractor and not as an employee and nothing contained
in this Agreement shall alter, change or modify the status of Consultant from that of an independent
contractor to that of an employee. Specifically, the Consultant does not have any rights to any
workman compensation maintained by CLIENT or any other CLIENT employee related benefits.
2. Services. Consultant shall provide the services under this Agreement as outlined in the
Scope of Services in Exhibit 1 of this agreement, said Exhibit 1 is made a part of this agreement.
3. Working Arrangements. Consultant shall report to the President of CLIENT, or their

designee. Consultant shall at all times conduct his business affairs in his own name, and shall not
implicitly or explicitly represent to any person or entity that he is other than a business entity
separate and apart from CLIENT that provides Services to CLIENT .
4. Terms of Agreement. This Agreement shall be effective as of January 1, 2015 and shall
continue in force until either party notifies the other of their desire to terminate this agreement.
However, notwithstanding the above, this agreement shall not to exceed more than three years
from the effective date referred to above.
5. Consulting Fees, and Reimbursement Expenses. Consultant represents and warrants to

CLIENT that all work and services rendered hereunder will be performed consistent with good
professional standards, principles and practices as defined under Maryland state law. As full
compensation for all services rendered under this Agreement CLIENT shall pay the Consultant a
monthly retainer fee of Three Thousand Dollars ($3,000) for services rendered Consultant will
submit invoices to CLIENT at the end of each monthly billing period.
EXHIBIT 11
6. Credit and Ownership of Products. Consultant agrees to promptly report to

CLIENT all inventions, discoveries, improvements, copyrightable material, trademarks,
programs, computer software and ideas of whatsoever nature conceived or made by
Consultant at any time while Consultant is rendering services to CLIENT. All such
inventions, discoveries, improvements, copyrightable material, trademarks, programs,
computer software and ideas for which no equipment, supplies, facility, or trade secret
information of CLIENT was used and which were developed entirely on Consultant's
own time, shall not constitute property of CLIENT unless:
(A) it related to
(i) Business of CLIENT or
(ii) CLIENT actually or demonstrably anticipated research or
development, or
(B) it results from
(i) Any work performed by Consultant from any servIces
provided to CLIENT by Consultant.
Consultant agrees to execute, acknowledge and deliver to CLIENT all
such papers, including applications for patents, applications for copyrights and trademark
registrations and assigtlillents thereof, as may be necessary, and at all times to assist
CLIENT ,its successors, assigns and nominees in every proper way to, patent or register
said inventions, discoveries, improvements, copyrightable material, trademarks,
programs, computer software or ideas in any and all countries and to vest title thereto in
CLIENT its successors, assigns or nominees.
7. Confidential Information. Consultant acknowledges that, as a result of

Consultant's engagement by CLIENT under this Agreement, Consultant may develop,
obtain or learn about information 9r trade secrets that are the property of CLIENT.
Consultant hereby covenants and agrees that Consultant will use Consultant's best efforts
and the utmost diligence to guard and protect such confidential information and trade
secrets, and that Consultant will not use for Consultant or others, or disclose or permit to
be disclosed to any third party or other person by any method whatsoever, any of such
confidential information or trade secrets of CLIENT. For purposes of this paragraph,
"confidential information or trade secrets" shall include, but not be limited to, any
and all marketing and advertising plans, specific areas of research and development,
project work, product formulations, processing employees, testing and evaluation
procedures, cost figures, construction plans and special techniques or methods of any
kind peculiar to CLIENT , or any information of whatever nature in the possession or
control of CLIENT which has not or have not been published or disclosed to the general
public or which gives to CLIENT an opportunity to obtain an advantage over
competitors who do not know of or use it.
Consultant further agrees that if this Agreement is terminated for any reason,
Consultant will return to CLIENT and will not take any originals or copies of any
records, papers, programs, computer software, documents, or any other matter of
whatever nature which contains confidential information or trade secrets of CLIENT.
2
If either party receives a subpoena or other validly issued administrative or

judicial process requesting Confidential Information of the other party, it shall provide
prompt notice, in accordance with paragraph 12 of this Agreement, to the other of such
receipt and give the disclosing party the opportunity to seek a protective order. The party
receiving the subpoena shall thereafter be entitled to comply with such subpoena or other
process to that extent permitted by law.
8. Additional Remedies. The covenants set forth in paragraphs 6 and 7 are made
by Consultant as additional consideration of CLIENT's retention of Consultant under this
Agreement. Consultant recognizes that irreparable injury will result to CLIENT and to
its businesses and properties in the event of any breach by Consultant of any of the
provisions of paragraphs 6 and 7 of this Agreement, and that Consultant's continued
retention by CLIENT is predicted on the commitments undertaken by Consultant
pursuant to said paragraphs. In the event of any breach of any of Consultant's
commitments pursuant to paragraphs 6 and 7, CLIENT shall be entitled, in addition to
any other remedies and damages available, to injunctive relief to restrain the violation of
such commitments by Consultant in any capacity whatsoever, and Consultant hereby
consents to the issuance of such relief forthwith in any court of competent jurisdiction.
9. Termination. This Agreement may be terminated in the immediate effect by (a)

CLIENT with or without cause, including, without limitations, failure to abide by the
terms of this Agreement and Consultant'S, misconduct, or by (b) the mutual consent of
both parties hereto (c) by either party hereto upon thirty (30) days advance written notice
given in accordance with paragraph 12 of this Agreement.
CLIENT's only obligation to Consultant in the event of any such termination will
be the payment to Consultant for the Consulting Services due to the date of effective
termination of this Agreement.
10. Indemnification. To the fullest extent permitted by law, Consultant shall

indemnify and hold harmless CLIENT against all claims, damages losses (including but
not limited to the loss of use of proper.ty) and expenses (including but not limited to
attorney's fees) arising out of or resulting from the performance of services under this
Agreement, caused in whole or in part by any negligent or willful act or omission of
Consultant.
To receive the foregoing indemnities, the CLIENT must promptly notify the
Consultant, in accordance with paragraph 12 of this Agreement, in writing of a claim or
suit and provide reasonable cooperation (at the Consultant's expense) and full authority
to defend or settle the claim or suit. The Consultant shall have no obligation to indemnify
the CLIENT under any settlement made without the Consultant's written consent.
-
11. Entire Agreement, Severability, Non-assignment. The provlSlons hereof
constitute the entire agreement between the parties. This Agreement shall supersede all
prior agreements and understandings between the parties and no representations or
statements made by any representative of CLIENT or Consultant, which are not stated
herein, shall be binding. No modification, amendment, or waiver of any term or
provision hereof shall be deemed effective unless it is in writing and signed by each party
hereto. A finding by any court of competent jurisdiction that any provision of this
Agreement or part thereof is unenforceable shall not affect the· enforceability of the
remaining provisions of this Agreement. Failure of or delay by either patty to enforce
rights under this Agreement shall not constitute a waiver of such rights. Consultant and
CLIENT may not assign this Agreement or any part thereof without the written approval
of the other.
12. Notices. All notices herein required shall be in writing and shall be served on the
parties as follows:
If to Consultant: Gary Brown

GB Abstracting & Consulting LLC
2118 Cilfton Ave.
Baltimore, Md. 21217
If to CLIENT: Keith Timmons, Esq., CPA

The Law Offices ofK.E. Timmons, Esq., CPA LLC
326 St Paul Place - 300
Personal delivery or the mailings of a notice by registered, certified or express

mail, return receipt requested or proof of delivery assumed, postage prepaid, shall be
sufficient service. Notice shall be deemed to have been served when personally delivered,
or if mailed, three days from the date same was posted. By notice complying with the
foregoing provisions of this paragraph, each party shall have the right to change the
mailing address for future communications to such party. Such change of mailing
address shall not be effective until actually received by the party to whom it is sent.
13. Publicity. Except as required by law or a party's fiduciary duty, neither party
shall disclose publicly or make any advertisement, public announcement or press release
concerning the relationship between the parties or the terms and conditions of this
Agreement without the other party's prior written consent
14. Arbitration. The parties agree that, in the event of a dispute relating to this
Agreement, they will work together in good faith first, to resolve the matter internally by
escalating it to higher levels of management and, then if necessary, to use a mutually
agreed alternative dispute resolution technique prior to resorting to litigation. If the parties
4
cannot reach agreement on an alternative dispute resolution technique, disputes shall be

settled by arbitration administered by the American Arbitration Association in Maryland
in accordance with its then-existing commercial arbitration rules. This provision shall not
apply to disputes involving confidentiality or infringement of intellectual property rights
(in which case either party shall be free to seek available remedies in any forum). The
prevailing party will be entitled to recover from the other party any and all cost reasonably
incurred by the prevailing party, including without limitation, reasonable attorney fees
connected with such litigation.
15. Law Applicable. This agreement has been entered into the State of Maryland
and the validity, interpretation and legal effect of this agreement shall be governed by the
laws of the State for Maryland applicable to contracts entered into and performed entirely
within such State.
IN WITNESS WHEREOF, the parties hereunder set their hand and seals on the day and
year first above wtitten.
BY.~ -BY:~--
Client: Catherine Pugh, Healthy Holly LLC Consultant: Gary Brown, GB Abstracting
& Consulting LLC
EIN#
5
.• . . ,
Healthy Holly LLC

3603 Dennlyn Rd.
email-cepughco@ao!.com
Exhibit 1
I. Outreach Services:
Work with graphic designers, proofreaders, and printers for the production of Healthy
Holly book(s)
Work with fashion designers and manufacturers for the creation and manufacturing of
the Healthy Holly baby clothing line.
Identify target audience oflocal & national businesses, local and national not-for-
profits, community groups and organizations to promote the purchase of Healthy
Holly Products.
II. Marketing Services :
Create an online presence through the creation of a company website.
Promoting/Manage the brand's social media outlets such as Facebook, Instagram, and
Twitter.
III. Sales Services:
Interact with customers to provide information on the Healthy Holly product line.
Assist in customer purchases.
Communicate with the customers via emails and telephone calls. Answer inquiries
regarding availability/concerns of/about the product line, pricing policy, etc.
Maintain records of the products sales, purchase and for submission to owner.
6
GB Consulting LLC Statement
1123 N Eutaw Street, Apt 408
Baltimore, Mavrland 21201
Date: I December 31, 2018
I -
Statement # /.
1-
Customer 10: ; Healthy Holly
Page 1 of
Bill To: Account Summary

Healthy Holly, LLC Previous Balance $
3603 Dennlyn Road Credits $ 78,575.00
Baltimore, Maryland 21217 New Charges $ 78,575.00
4103671311 Total Balance Due $
healthyholly@healthyholly.com Payment Due Date
------ASAP
_Hi.0.@¥- Description
---
... ,
Credits Line Total
~ HH-2015-01 New Charges for HH-2015-01 $ 3,000.00 $ 3,000.00
I
2/5/15 HH-2015-02 New Charges for HH-2015-02 $ 3,000.00 $ 6,000.00
8115/15 HH-2015-08 New Charges for HH-2015-08 $ 3,000.00 $ 24,000.00
115116 HH-2016-01 New Charles for HH-2016-01 $ 3,000.00 $ 39,000.00
1/9/16 Payment received $ 35,975.00
1/13/16 Payment received $ 6,000.00 23,975.00
215/16 HH-2016-02 New Charges for HH-2016-02 $ 3,000.00 26,975.00
2126/16 Payment received $ 7,500.00 19,475.00
3/5116 HH-2016-03 New Charges for HH-2016-03 $ 3,000.00 22,475.00
3/9/16 Payment received $ 10,000.00 12,475.00
4/5/16 HH-2016-04 New Charges for HH-2016-04 $ 3,000.00 15,475.00
10/4/16 Payment received $ 10,000.00' $ 10,675.00
EXHIBIT 12
1215/16
Case 1:19-cr-00541-DKC
HH-2016-12 New Charges for HH-2016-12
Document 17-12 Filed 02/13/20 Page 2 of 2
$ 3,000.00 $ 19,675.00
12/16/16 Payment received $ 7,000.00 $ 12,675.00
12116/16 Payment received $ 5,000.00 $ 7,675.00
12116/16 Payment received $ 1,400.00 $ 1,275.00
12/16/16 Payment received $ 350.00 $ 925.00
10/15/17 HH-2017-10 New Charles for HH-2017-10
Je~ &('~;(.of\. $ 3,250.00 $ 4,175.00
5/15/18 HH-2018-05 New Charges for HH-2018-05
f?T1 fhx~e,~~,>
$ 75.00 $ 4,250.00
11/15/18 HH-2018-11 New Charles for HH-2018-11 $
L0" \ K ~''j 3,250.00 $ 7,500.00
1211/18 Payment received $ 5,500.00 $
Account Current Balance $ -

Your account balance is 0 Please make your payment to cover the balance by the due date.
Make all checks payable to Gary Brown Jr.
Thank you for your business!
Should you have any enquiries concerning this statement, please contact Gary Brown, Jr. at
1123 N Eutaw Street, Unit 408, Baltimore, Maryland 21201

GB Consulting INVOICE
2118 Clifton Ave
BILLED TO:
Healthy Holly, LLC INVOICE NUMBER HH-2015-01
3603 Dennly Road INVOICE DATE January 5, 2015
TERMS Net 30
SHIPPED TO:
Gary Brown, Jr.
PREPAID or COLLECT COLL
Sales Tax Rate: 0.00%
QUANTITY DESCRIPTION UNIT PRICE AMOUNT
1 Promotion, Sales, and Marketing Outreach of 3,000.00 3,000.00
Healthy Holly Books & Clothing Brand
SUBTOTAL 3,000.00
DIRECT ALL INQUIRIES TO: MAKE ALL CHECKS PAYABLE TO: TAX 0.00
Gary Brown, Jr. Gary Brown, Jr. FREIGHT 0.00
$3,000.00
email: PAY THIS
AMOUNT
THANK YOU FOR YOUR BUSINESS!
EXHIBIT 13
c GB Consulting
2118 Clifton Ave
INVOICE
BILLED TO:
3603 Dennly Road INVOICE DATE February 5, 2015
TERMS Net 30
SHIPPED TO:
Gary Brown, Jr.

SUBTOTAL 3,000.00
53,000.00
email: PAY THIS
AMOUNT

r GB Consulting
2118 Clifton Ave
INVOICE
BILLED TO:
3603 Dennly Road INVOICE DATE March 5, 2015
TERMS Net 30
SHIPPED TO:
Gary Brown, Jr.
C
SUBTOTAL 3,000.00
$3,000.00
email: PAY THIS
AMOUNT
r
2118 Clifton Ave
BILLED TO:
3603 Dennly Road INVOICE DATE April 5, 2015
TERMS Net 30
SHIPPED TO:
Gary Brown, Jr.

SUBTOTAL 3,000.00
9 0,000.00
email: PAY THIS
AMOUNT

r GB Consulting
2118 Clifton Ave
INVOICE
BILLED TO:
3603 Dennly Road INVOICE DATE May 5, 2015
TERMS Net 30
SHIPPED TO:
Gary Brown, Jr.

r
SUBTOTAL 3,000.00
$3,000.00
email: PAY THIS
AMOUNT
r
r GB Consulting
2118 Clifton Ave
INVOICE
BILLED TO:
3603 Dennly Road INVOICE DATE June 5, 2015
TERMS Net 30
SHIPPED TO:
Gary Brown, Jr.

SUBTOTAL 3,000.00
$3,000.00
email: g PAY THIS
AMOUNT

e GB Consulting
2118 Clifton Ave
INVOICE
BILLED TO:
3603 Dennly Road INVOICE DATE July 5, 2015
TERMS Net 30
SHIPPED TO:
Gary Brown, Jr.

SUBTOTAL 3,000.00
$3,000.00
email: PAY THIS
AMOUNT

r GB Consulting
2118 Clifton Ave
INVOICE
BILLED TO:
3603 Dennly Road INVOICE DATE August 5, 2015
TERMS Net 30
SHIPPED TO:
Gary Brown, Jr.

SUBTOTAL 3,000.00
S3,000.00
email: PAY THIS
AMOUNT

2118 Clifton Ave
BILLED TO:
3603 Dennly Road INVOICE DATE September 5, 2015
TERMS Net 30
SHIPPED TO:
Gary Brown, Jr.

SUBTOTAL 3,000.00
4 $3,000.00
email: g PAY THIS
AMOUNT

r
,
GB Consulting
2118 Clifton Ave
Baltimore, Maryland 21217 - -
INVOICE
BILLED TO: •
3603 Dennly Road INVOICE DATE October 5, 2015
TERMS Net 30
SHIPPED TO:
Gary Brown, Jr.

SUBTOTAL 3,000.00
9 $3,000.00
email: PAY THIS
AMOUNT

r GB Consulting
2118 Clifton Ave
INVOICE
BILLED TO:
3603 Dennly Road INVOICE DATE November 5, 2015
TERMS Net 30
SHIPPED TO:
Gary Brown, Jr.

SUBTOTAL 3,000.00
$3,000.00
email: PAY THIS
AMOUNT

2118 Clifton Ave
BILLED TO:
3603 Dennly Road INVOICE DATE December 5, 2015
TERMS Net 30
SHIPPED TO:
Gary Brown, Jr.
SUBTOTAL 3,000.00
$3,000.00
email: PAY THIS
AMOUNT

r GB Consulting
2118 Clifton Ave
INVOICE
BILLED TO:
3603 Dennly Road INVOICE DATE January 5, 2016
TERMS Net 30
SHIPPED TO:
Gary Brown, Jr.

SUBTOTAL 3,000.00
$3,000.00
email: PAY THIS
AMOUNT

r
,
GB Consulting
2118 Clifton Ave
INVOICE
BILLED TO:
3603 Dennly Road INVOICE DATE February 5, 2016
TERMS Net 30
SHIPPED TO:
Gary Brown, Jr.

SUBTOTAL 3,000.00
$3,000.00
email: PAY THIS
AMOUNT

2118 Clifton Ave
BILLED TO:
3603 Dennly Road INVOICE DATE March 5, 2016
TERMS Net 30
SHIPPED TO:
Gary Brown, Jr.

SUBTOTAL 3,000.00
$3,000.00
email: g PAY THIS
AMOUNT

2118 Clifton Ave
BILLED TO:
3603 Dennly Road INVOICE DATE April 5, 2016
TERMS Net 30
SHIPPED TO:
Gary Brown, Jr.

SUBTOTAL 3,000.00
$3,000.00
email: g PAY THIS
AMOUNT

2118 Clifton Ave
BILLED TO:
3603 Dennly Road INVOICE DATE May 5, 2016
TERMS Net 30
SHIPPED TO:
Gary Brown, Jr.

SUBTOTAL 3,000.00
$3,000.00
email: PAY THIS
AMOUNT

2118 Clifton Ave
BILLED TO:
3603 Dennly Road INVOICE DATE June 5, 2016
TERMS Net 30
SHIPPED TO:
Gary Brown, Jr.
SUBTOTAL 3,000.00
$3,000.00
email: PAY THIS
AMOUNT

r GB Consulting
2118 Clifton Ave
INVOICE
BILLED TO:
3603 Dennly Road INVOICE DATE July 5, 2016
TERMS Net 30
SHIPPED TO:
Gary Brown, Jr.

SUBTOTAL 3,000.00
4 $3,000.00
email: PAY THIS
AMOUNT

2118 Clifton Ave
BILLED TO:
3603 Dennly Road INVOICE DATE August 5, 2016
TERMS Net 30
SHIPPED TO:
Gary Brown, Jr.

(48
SUBTOTAL 3,000.00
$3,000.00
email: PAY THIS
AMOUNT

2118 Clifton Ave
BILLED TO:
3603 Dennly Road INVOICE DATE September 5, 2016
TERMS Net 30
SHIPPED TO:
Gary Brown, Jr.

SUBTOTAL 3,000.00
$3,000.00
email: PAY THIS
AMOUNT

r GB Consulting
2118 Clifton Ave
INVOICE
BILLED TO:
TERMS Net 30
SHIPPED TO:
Gary Brown, Jr.

SUBTOTAL 3,000.00
$3,000.00
email: PAY THIS
AMOUNT
C
r GB Consulting
2118 Clifton Ave
INVOICE
BILLED TO:
TERMS Net 30
SHIPPED TO:
Gary Brown, Jr.
SUBTOTAL 3,000.00
9 $3,000.00
email: PAY THIS
AMOUNT

A -
2118 Clifton Ave
BILLED TO:
3603 Dennly Road INVOICE DATE December 5, 2016
TERMS Net 30
SHIPPED TO:
Gary Brown, Jr.
SUBTOTAL 3,000.00
9 $3,000.00
email: g PAY THIS
AMOUNT

BILLED TO:
TERMS Net 30
SHIPPED TO:
Gary Brown, Jr.
SUBTOTAL 3,250.00
$3,250.00
email: PAY THIS
AMOUNT

r GB Consulting
INVOICE
BILLED TO:
3603 Denny Road INVOICE DATE May 15, 2018
TERMS Net 30
SHIPPED TO:
Gary Brown, Jr.
1 Reimbursement for printing 75.00 75.00
SUBTOTAL 75.00
$75.00
email: PAY THIS
AMOUNT

r GB Consulting
INVOICE
BILLED TO:
TERMS Net 30
SHIPPED TO:
Gary Brown, Jr.
SUBTOTAL 3,250.00
9 $3,250.00
email: g PAY THIS
AMOUNT

\-
3603 Dennlyn Road o BaltHmoler Maryiland 2l2l[
o 4#.762.2199
I
I
February 1,2417
Diane Bell-McKoY
President and CEO
Associated Black Gharities
1114 GathedralStreet
Baltimore, MD 21201'551 5
Re: Healthy Holly Book Purcfrase lnvoice: ABC43
Dear Mrs. BellY-McKoY
Per your request for a distribution plan.
Heatthy Holly LLC will be disfihuting Healthy Holly: Fruit Corne in the Cr,lors Like
SOOO
Ue nilnbow to the Baltimore City Public Schools and will be delivered to their
warehouse 5300 Pulaski Highraray, Baltimore, Maryland 21205. BCPS will be
distributing the books to their students.
lf you have any questions or concerns feel free to give me a calt.
Sincerely,
Aqw
Gary Brown, Jr.
Chief Operating fficer
\-
ABC-001 158
EXHIBIT 14
Press Conference
March 28, 2019
Mayor Catherine Pugh = MCP

Unknown Male Reporter #1: = UMR#1
Unknown Male Reporter #2 = UMR#2
Unknown Female Reporter#1 = UFR#1
Unknown Female Reporter#2 = UFR#2
MCP: The last several days due to contracting pneumonia and against my doctor’s orders, I am
here. If you know me, it is really difficult for me to sit still. I think most of you all know
that I want to say at the start, I understand the objections and some of the concerns of
many. Over my decision to enter into a financial relationship with the University of
Maryland Medical System to produce Healthy Holly children’s book series. And I
sincerely want to say that I apologize that, I have done something to upset the people, the
people of Baltimore that I love, care about, and work hard every day for. Most of you all
know that my day starts about 4:30 a.m. in the morning and I usually don’t get home until
11:00 or 12:00. For me it’s everything that I can do to help move our city forward. I also
want to make it very clear I never intended to do anything that could not stand up to
scrutiny and that is why I disclosed this on my University of Maryland Medical
Disclosure Statement all moneys received. It really was about a shared mission. One
that I am excited to share and one that has been a part of my life for quite a long time.
Even as a public servant, to provide pathways for our young people and to put within the
grasp, their grasp, the tools and resources they need to succeed. This shared mission is
why I entered into this arrangement with the University of Maryland Medical Systems.
There was never any formal contract.
We talk about book one back when I was State Senator I believe it was around 2008, I
attended a national conference focused on the epidemic of childhood obesity. In
particular they talked about African-American children and children of color. What they
said was that our gener - our young people, the young people of this country, have
become the most obese population of young people in the next generation. So my
question was --what are we doing to change that? I asked the health department, the
United State Health Department representative and he said well we’re different from the
Department of Education. I said well don’t y’all collaborate? He said no, we focus on
health, they focus on education. So by that time, I got a little bored around the
conversation and started scribbling and when I got home I scribbled this girl called
Healthy Holly. I was trying to figure out a way to create a character that could talk to
young people about how they could improve their health. I know there is discussion
around the colors and what the book looks like but I can tell you that we tested groups of
EXHIBIT 15
young people and what attracts them to the book is the colors. What we were hoping was
that as they went inside those books that they would get the information that was inside.
The focus again was getting children to exercise and to eat right. So it was in September,
2010 that I began publishing my first children’s book. This is not the first book I have
ever published and Healthy Holly exercising was fun was produced in limited quantities
by myself. I shared it with groups, children, organizations and prior to a board meeting at
the University of Maryland Medical Systems, I shared it with one of the colleagues there.
They liked it and felt that it was a part of their own mission and I raised, they raised the
question how many and I said that I wanted to get this out to young people in the
Baltimore City Public Schools and I think, at that time, the population of k through
whatever I got the date – uh the level, but we were trying to get through k through third
grade because that is the level the book is written on It’s about 18,000-20,000 young
people. They actually sent a letter and I’d like to, we will provide a copy for you. As
you can see, the letter comes from the University of Maryland Medical Systems and it
goes to and it says, “Donation of Educational Materials” and you’ll get a copy of this. It
was addressed to "Dear Dr. Santelises, as part of the mission of healthcare provider the
University of Maryland Medical System Corporation will provide outreach benefits to
address the health needs and priorities in our community." In essence, what they said the
medical system would make arrangements for the purchase of the books and to
installments. If the medical system proposes donation is acceptable to “BCP,” please
indicate by signing and dating this letter of agreement. I understand that "BCP" will
accept the medical systems donation of these educational materials in order to provide
copies to the students. Let me be clear, you can’t go into the public-school system and
just give a book. I went before the academic community to review the concept of the
book and as you can see with the document, it was accepted as something that they could
use. It certainly seemed like an ideal way to combine focus and forces to bring a positive
influence to those who need it the most. I agreed to produce for Baltimore City Public
Schools 20,000 actually for the University of Maryland for the books for the Baltimore
City Public Schools 20,000 books at a cost of 5 dollars each to the University of
Maryland Medical System way of distribution to the Baltimore City School children.
Those first books were printed and shipped by Kromar on June 10, 2011, to the Baltimore
City Headquarters at 200 East North Avenue and here is the shipping manifest. The
shipping manifest shows where Baltimore City Public Schools’ Board of Education, 200
East North Avenue, Room 455, 20,000 Healthy Holly books and the phone number that
when you’re shipping the books. At that time 20,000 were left with them and I received
2,000 books so that I could walk around with those books to the various schools as I was
reading to them. The delivery date, as I pointed out was on June 19th, and directly to the
school system. Let me remind you all that there is no contract, no date specific of
delivery um that the book was to be produced and sent to the Baltimore City Public
School System. They were sent Fedex directly to the schools.
Two years later we produced just over 21,000 more books to Baltimore City Public
Schools Healthy Holly A Healthy Start For Herbie. 1,500 of those books were shipped
directly to me so that again, I could use them when walking around to the schools that I
2
visited. Then on March 28, 2013, 18,500 books were shipped as before to the Baltimore
City Board of Election at 200 East North Avenue, Room 405, and I also have a shipping
manifest for that because the books get shipped directly to them.
Let’s talk about book three. In 2015, I provide the same for a book called Healthy Holly
Fruits Come In Colors Like The Rainbow, 21,000 books were printed. Again, 19,500
went directly to the schools, same address, and the other 1,500 went to me to walk around
with and to visit schools. It has come to my attention there remain some 3,700 books in a
Pulaski Highway warehouse belonging to the school system. I am making arrangements
to retrieve those books in order to make them available to our children in our community.
Now in November of 2016, it was our intent again to print the new edition of the Healthy
Holly Series, Healthy Holly Vegetables are not just green and distribute in early 2017.
University of Maryland Medical System paid 100,000 dollars for these books. The
shipment of these books to the Baltimore Public Schools is in the process of completion
and was delayed. There was no deadline to ship those books and I’ll give you the
prototype.
Now getting to the fourth book of the Healthy Holly Series into the hands of our children
as soon as possible. You all know that book number five we gave back the 100,000
because when November the 18th, the person who does our layout our book took very ill
and is now recovering and as we have no date of her proposed return as she is undergoing
a prolonged rehabilitation and that’s why we returned those ones. It is still my intention
as I said even in returning those books, their 100,000 dollars that we will still produce
those books at my own cost and make sure they’re distributed to our Baltimore City
Public School children. Let me stress, the Healthy Holly Initiative was never about
books, it was about a lifestyle. We developed children books and then my thought
process was what else can we do to send the message that our children need to live
healthy and we need to make sure that we’re providing every opportunity for them to be
healthy, and so then I thought, why not a baby clothing line? So we’ll share those with
you. I began with my own design one for girls and one for boys and then, I um engaged a
plant up in York, Pennsylvania. A group of ladies, probably about 20 of them working in
a manufacturing firm hoping that this line of clothing would become a real reality.
Again, the whole concept, you can bring the whole concept was to teach our children
how to live healthier lifestyles. These are the bibs some of them (showing baby bibs),
and every city that I went into, the first thing I would be - would be to visit a children’s
bookstore or clothing store to see if there was anything being produced of this nature. As
you can see from the bibs, it was about teaching children to walk, run, crawl, skip, dance,
some to eat healthier. Play and crawl, walk, we did them in little, these are all the
samples (shows baby clothes) the little caps. and my-my unique design of bottoms. It’s a
little difficult to get out for the babies, but…again, just trying to send the message --
jump, walk, crawl getting our children to exercise early. Then I thought, if I could teach
them it’s mostly teaching parents that these are some of the things their children should
3
be doing. I figured if they would wrap their children in blankets that just were frogs
crawling or rabbits hopping, but sending the message to walk, run, jump, and these were
the little onesies (showing baby clothes) -- trying to send the same message to walk, to
play, to crawl, and the same thing here with the messaging swim, jump, play, walk, run,
crawl. Crawl, walk, skip, play, jump, just trying to get our children to exercise, and then
we developed and gave out hundreds of these across the city. This is emanating the-the
book uh with the jump ropes so we passed those out along with the Healthy Holly uh
trying to get our children to jump rope envisioning having jump rope contests. There are
a number of other products that we wanted to be able to give away to families to get them
to understand the importance of getting your children to exercise. Let me just say, I
understand the concerns that have been raised by members of our community. As you all
know, we’ve made some disclosures this was indeed an unintended consequence. I will
continue to write, it’s something I have been doing for years and I look for ways to
inspire our children. For me there is no more urgent priority then clear pathways for our
young people. It is our collective responsibility and obligation to give young people
every indication that we care for them and we care for their future. I am deeply sorry for
any lack of confidence or disappointment which this initiative may have caused of our
Baltimore City residents, friends, and colleagues. In hindsight, this arrangement with the
University of Maryland Medical System was a regrettable mistake. I also wish to
apologize for causing any reputational damage to the University of Maryland Medical
System. As your Mayor, I am committed to conducting my office in a way that maintains
your trust and reflects only positivity on our city. I hope that I have helped to clarify my
motives and also make clear that the collaboration with the University of Maryland
Medical System that led to the printing and distribution of thousands and thousands of
books for young children in our community. I do hope that we find out from the school
system where the rest of those books are, and let me just say, that because this matter is
under review, along with arrangement of other programs of the University of Maryland
Medical Systems I have been advised that I cannot take questions but I can tell you that
this has been very concerning and I thank you for listening. Thank you.
UMR#1: Who approached who about this deal? Did you approach them?
UMR#2: Can we see the manifest for book three? The shipping manifest? Do you have
that?
MCP: Yes, the manifest, yes.
UFR#1: Will we be able to get copies of the shipping labels?
MCP: Yes.
UFR#2: Mayor Pugh did you sell books to any other entity besides the University of
Maryland Medical System?

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Case 1:19-cr-00541-DKC Document 17 Filed 02/13/20 Page 1 of 37

IN THE UNITED STATES DISTRICT COURT

CRIMINAL CASE NO. DKC-19-0541

UNITED STATES OF AMERICA,

GOVERNMENT=S SENTENCING MEMORANDUM

A. Stipulation to Statement of Facts and

II. The Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

A. The Defendant Engaged in a Multidimensional Scheme to

1. The Fraudulent Sale and Dissipation of Book One . . . . . . . . . . . . . . . . . . 5

B. The Defendant Corruptly Solicited Funds from Purchasers

C. The Defendant Deliberately Misused Her Publishing Business

D. The Misuse of Government Resources to Execute the Fraud . . . . . . . . . . . 14

E. The Defendant Laundered Proceeds of the Scheme to Defraud

F. The Solicitation of Illegal Campaign Contributions from

1. The $20,000 Check Payable to 2 Chic Boutique . . . . . . . . . . . . . . . . . . . . . 17

G. The Fraud Perpetrated upon the IRS was Also Longstanding

1. Hiding the Income Generated by Healthy Holly Sales

H. The Use of a Philanthropic Message to Defraud . . . . . . . . . . . . . . . . . . . . . 24

1. Pugh Paid for Gary Brown’s Lawyers to Keep Him Quiet . . . . . . . 25

IV. Sentencing Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

IN THE UNITED STATES DISTRICT COURT

UNITED STATES OF AMERICA :

GOVERNMENT’S SENTENCING MEMORANDUM

February 27, 2020 at 10:00 a.m.

A. Stipulation to Statement of Facts and Advisory Guideline Range

Count One (conspiracy to commit wire fraud)

Base offense level (USSG §§ 2B1.1(a)(1), 2X1.1(a)) 7

Upward adjustment for loss resulting from the offense +12

Upward adjustment for sophisticated means +2

Upward adjustment for abuse of a position of

Upward adjustment for misrepresentation of +2

Grouping - multiple count adjustment (USSG +1

Downward adjustment for timely acceptance of -3

Final adjusted offense level 23

be corrupt politicians from breaching the public’s trust.

II. The Law

2006). As the Fourth Circuit noted,

sentencing factors the Court must consider are:

(3) the kinds of sentences available;

A. The Defendant Engaged in a Multidimensional Scheme to Defraud that

an author of children’s books and a worthy candidate for elected office.

understood the entrepreneurial costs of starting a for-profit publishing business. Indeed, in

“consulting services,” “office exp[enses]” and “marketing.” Id.

had been donated to Baltimore City schoolchildren.

1. The Fraudulent Sale and Dissipation of Book One

inventory of Book One left.

unlawfully pocket a total of $15,070.

2. The Fraudulent Sale and Dissipation of Books Two and Three

December 2015. Id.

remaining 16,407 copies of Book Two were dissipated via giveaways.

between December 2015 and December 2016. Id.

the remaining 2,531 copies of Book Three via giveaways.

3. False Promises to Print and Deliver Books

printing either Book Four or Five for UMMS.

B. The Defendant Corruptly Solicited Funds from Purchasers Doing

As a career politician, Pugh understood the importance of avoiding conflicts of interest

in self-dealing for personal gain. 4

from the multi-million dollar Baltimore Children and Youth Fund.

Trauma Center to help fund a violence prevention program.