FBI and IRS Raid Mayor’s Home Amid Bookgate Scandal

On April 25, 2019, FBI and IRS agents executed search warrants and raided Baltimore Mayor Pugh’s home, City Hall, the apartment of a Pugh aide, and the Maryland Center for Adult Training amid the Baltimore “Bookgate” corruption scandal. The raid is the first public display of federal law involvement. Soon after the raid, Maryland Governor Hogan called on Mayor Pugh to resign from office.

Earlier this year, it was revealed that Mayor Pugh engaged in questionable sales of her self-published “Healthy Holly” children’s books. Among other allegations, it is reported that Mayor Pugh had book deals with entities seeking contracts with the city, such as Kaiser Permanente, and that the University of Maryland Medical System (UMMS) paid in excess of $500,000 to Pugh for her books while she was a UMMS board member.

Since the scandal broke, Mayor Pugh has resigned from the UMMS board and returned the last payment of $100,000 from UMMS. Also, on the same day that Maryland Governor Hogan asked the stated prosecutor to begin an investigation, Mayor Pugh announced that she was taking an indefinite leave of absence due to the effects of a battle with pneumonia.

Although Mayor Pugh has stated that she properly reported and paid tax on the sales of her books, she has declined to provide copies of her personal and business tax records. The IRS’s criminal investigation team’s participation in the raid indicates a likely investigation to ensure that all income from the dealings was properly reported.

Tags: Blog, Tax Crimes