The personal finances of Baltimore State’s Attorney Marilyn Mosby will be on full display at her federal trial next month, with federal prosecutors previewing that they will present an FBI accountant and IRS agents who will walk jurors through hundreds of pages of the outgoing top prosecutor’s bank and credit card statements.
In their latest court filing, prosecutors laid out the case against Mosby in perhaps the clearest terms yet, and included charts showing her cash “inflows” and “outflows” for 2019 and 2020.
Those charts show Mosby’s city paycheck increased almost $10,000 year over year, and that she also received an extra $10,800 in miscellaneous income in 2020. Despite that, she sought and obtained $90,000 in early distributions of retirement funds saying she had suffered a financial hardship related to the coronavirus pandemic.
The two-term state’s attorney is charged with four counts of perjury and making false statements and heads to criminal trial next month after losing the Democratic primary election to defense attorney Ivan Bates. Mosby finished last of three candidates in the race, with 29 percent of the vote, and the trial could put her law license in jeopardy. She pledged to continue running the office through the end of the year without distraction.
In court filings and public comments, Mosby and her lawyers have accused prosecutors of conducting a witch hunt by combing through every aspect of her life looking for violations. So far, they’ve offered various legal defenses to the charges, claiming she suffered businesses losses, that retirement plan regulators failed to notify her of the requirements for withdrawals, and that she was kept in the dark and later lied to by her husband, City Council President Nick Mosby, about a federal tax lien placed on their property.
Mosby accessed $90,000 from a retirement fund that participating city employees typically would not be able to withdraw until their retirement. Unlike a 401(k), such funds couldn’t be withdrawn early, even by incurring a penalty. The CARES Act changed that, but those withdrawing funds had to demonstrate a financial hardship related to the pandemic, including being quarantined, furloughed or laid off, having reduced work hours, being unable to work due to lack of child care, or the closing or reduction of hours of a business.
“ ... She had not suffered any of the adverse financial consequences she falsely claimed to have suffered in order to get the money,” federal prosecutors wrote in a motion filed Friday night related to anticipated government witnesses.
Mosby’s take-home salary increased from $141,450 to $151,270, and a “miscellaneous” category of income increased from $13,500 to $24,275. During that time, prosecutors said in the motion, Mosby spent more than $100,000 in credit card purchases, $80,000 in loans and almost $65,000 in other miscellaneous expenditures.
Starting in May 2020, she tapped the retirement funds to purchase two homes in Florida worth more than $1 million, the government says. And all while she and her husband owed $45,000 in back taxes.
Prosecutors’ latest filing lays out the allegations in the case much like an opening statement.
Mosby was indicted by a grand jury in January, with prosecutors saying she lied about a financial hardship in order to access the retirement funds, and then lied on paperwork related to the purchase of the Florida properties.
She said one of the homes would be a second home — when she filed other paperwork saying she planned to rent it out — and prosecutors say she lied about the federal tax lien when asked if she had any outstanding debts or liens. They say Mosby had to know about the tax problem because her tax refunds were intercepted. That included both her and Nick’s joint income taxes, and when she started filing individually in 2020.
A little more than a month after her refund was intercepted, in July 2020, Mosby purchased an eight-bedroom home in Kissimmee, Florida, for $545,000.
Prosecutors say she used the COVID-19 hardship withdrawal toward the down payment for that property, then made a series of false statements in mortgage applications: she did not disclose that she owed significant amounts of federal taxes, and answered “no” to a separate question of: “Are you presently delinquent or in default on any Federal debt or any other loan, mortgage, financial obligation, bond, or loan guarantee?”
She also signed a “second home rider” saying she would maintain “exclusive control” over the property and would not rent the property or give a management firm or any other person or entity any control over the occupancy or use of it. The rider allowed Mosby to obtain a lower interest rate on the mortgage, and reduce the amount of cash she had to put down in order to buy it.
But one week before she signed the second home rider, she had executed an agreement with a vacation home management company giving them control over the property, prosecutors say.
Prosecutors say she used a second hardship withdrawal to buy a two-bedroom condo in Longboat Key, Florida, for $476,000 in February 2021. She did not disclose that she owed significant amounts of federal taxes, and answered “no” when asked if she was “presently delinquent on any federal debt or any other loan, mortgage, financial obligation, bond or loan guarantee.”
She listed the mortgage on the Kissimmee home, three installment loans, the car loan for her BMW and a revolving credit card liability — but not the $45,000 tax lien. Prosecutors also say she gave $5,000 to her husband, who then provided the money to the escrow agent and described it as a gift. The purpose, the government alleges, was to lock in a lower interest rate. And she claimed to have lived in Florida for 70 days from December 2020 through January 2021 in order to claim the property as a second residence.
Mosby created a business in 2019 called Mahogany Elite Enterprises, which she initially failed to disclose on ethics forms. It included two trade names for consulting and travel businesses, which she intended to use to provide travel opportunities to underprivileged youth. Through a spokeswoman at the state’s attorney’s office as well as a personal lawyer, Mosby said that she did not intend to operate the business while in office. But her lead attorney, A. Scott Bolden, has made comments suggesting they plan to say Mosby did intend to operate the business but was thwarted by the pandemic.
The latest court filings come as prosecutors and the defense are battling over whether Mosby can call expert witnesses to explain why she shouldn’t be held liable for any mistakes that were made in the transactions.
The defense has said it plans to call experts who would explain that the retirement fund administrator “failed to appropriately and properly inform and advise Ms. Mosby of the requirements necessary to make early withdrawal(s) from her 457(b) plan.” That same expert would “also offer expert testimony that the questions asked by Ms. Mosby of the plan administrator, including that she planned to use the 457(b) funds to purchase a second home or investment property, should have resulted in the plan administrator providing Ms. Mosby with additional guidance about the eligibility requirements for a 457(b) withdrawal.”
Prosecutors call that “a plain attempt to shift blame from the Defendant to third-parties.” They say their own witnesses will not be testifying as “experts” but rather as witnesses who analyzed the evidence as part of the investigation.
The defense also wants to exclude references to other investigations, such as the inspector general investigation into Mosby’s travel. During the course of those investigations, Mosby said the travel business was inoperable.
“The Defendant’s statements in prior investigations that her businesses were inoperable are clearly relevant in proving that element of the offense, that the Defendant did not suffer from the ‘closing or reduction of hours of a business that she owned,’” the government wrote.
Mosby has also said that she was kept in the dark about the tax lien, and that her husband lied to her and said it was paid off. But prosecutors said Friday that in a January 2021 letter to the bar counsel of the Attorney Grievance Commission, her attorneys demonstrated she “not only knew the lien had not been paid off on January 6, 2021, her counsel enclosed a copy of the ongoing installment agreement and a statement along with it that showed only a single payment had been made.”
Reporter Tim Prudente contributed to this story.
justin.fenton@thebaltimorebanner.com
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