Office & Homes of Baltimore Mayor Raided by FBI, IRS

Baltimore Mayor Catherine Pugh addresses a gathering during the annual meeting of the U.S. Conference of Mayors in Boston on June 8, 2018. (AP Photo/Charles Krupa, File)

BALTIMORE (CN) — FBI and IRS agents conducted sweeping raids Thursday morning on Baltimore Mayor Catherine Pugh, searching both of the Democrat’s homes as well as her offices at city hall, the offices of a nonprofit with which she is associated and the office of her personal lawyer.

The move increases pressure on the embattled Pugh, who has not been seen in public for at least three weeks, and her crumbling administration of a troubled city that in recent years has endured extraordinary violence and political instability. 

In March the Baltimore Sun broke stories detailing bulk purchases of Pugh’s self-published children’s books by the University of Maryland Medical System and other state organizations over which the mayor had influence as either a board member or state senator. Pugh made nearly a million dollars from the sales but did not disclose that income on state ethics disclosure forms.

The state prosecutor opened an investigation as Pugh refused to disclose accounting details, characterizing media inquiries as a “witch hunt.”

Following the mayor’s announcement early this month that she was taking a leave of absence to recover from a bout of pneumonia, the entire city council called on April 8 for Pugh to resign. She declined to do so and the council has no power to remove her. 

Council members have prepared several proposed charter amendments to shore up their power and to institute a process of removing the mayor, but the measures cannot take effect until late 2020, after the next election.

Several of Pugh’s aides have quit or been fired by Acting Mayor Bernard C. “Jack” Young, who told the Sun this morning that he had no idea the FBI was going to search parts of City Hall. 

IRS spokeswoman Veronica Kyriakides confirmed that an investigation is also underway by the agency’s Criminal Investigations Division, which investigates tax matters and money laundering. 

One of Pugh’s aides, Gary Brown Jr., pleaded guilty to criminal charges stemming from illegal campaign contributions he funneled through relatives’ bank accounts during Pugh’s 2017 campaign. The plea cost him a seat in the Maryland Legislature, but Pugh kept him on her office’s payroll until his firing this week.

The state prosecutor also investigated a series of other large contributions that came from bogus LLCs associated with the politically wired owner of hair salon, but no one was charged in that matter. 

Pugh is a former journalist and entrepreneur. She owned a high-end thrift store and consignment shop with longtime Baltimore Comptroller Joan Pratt and Afra Vance-White, the city’s director of external relations who was placed on leave and then terminated this week by Mayor Young. The store was suddenly closed this month, the Sun reported.

Police would not allow reporters into City Hall this morning as federal agents searched. Agents were reportedly seen at both of Pugh’s homes. A receptionist who answered the phone at Pugh’s lawyer’s office did not let on that federal agents were waiting there to speak to him; he did not return a call for comment.

Agents also searched offices at the Maryland Center for Adult Training in the impoverished Park Heights neighborhood, an organization that Pugh previously had served as resident agent and that Brown was listed as directing in its latest tax filing

The Sun says two other Pugh staffers — Poetri Deal, whom Young also fired this week, and Vance-White — were listed as board members. Keith Timmons, Pugh’s campaign treasurer, was listed as the nonprofit’s treasurer in its 2016 tax form.

In 2016 the center’s revenues were less than $250,000, according to the tax filing. The center’s mission is to train and place unemployed disadvantaged people in jobs.

The investigation into Pugh comes amid extraordinary challenges for the city of 600,000, which has lost tens of thousands of residents in recent years. Three weeks ago a federal judge sentenced Pugh’s hand-picked police chief to 10 months in prison for income-tax fraud. He was the city’s third police commissioner in three years as the murder count spiked above 300 — higher than it had been in three decades. Federal prosecutors also busted a squad of officers who robbed people of cash and drugs while charging the city overtime rates to do so.

Young’s spokesman, Lester Davis, says the acting mayor had no advance notice of the federal actions and that he plans on conducting “business as usual.”

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