Former Prosecutor Avoids Prison, But How Did She Get Here?

A federal court judge spared Marilyn Mosby from spending a minute behind bars for mortgage fraud and perjury.

Throughout the nearly six-hour hearing inside a Greenbelt, Maryland, courthouse were three rooms reserved for the former Baltimore City state’s attorney’s supporters who traveled from across the country.

Statements were read by nearly a dozen people, including Mosby’s siblings, civil rights attorney Ben Crump, and former St. Louis Circuit Attorney Kim Gardner, as well as formerly incarcerated and wrongfully convicted men Mosby’s office gave second chances to.

Prosecutors stood firm in their stance to send Mosby to prison because she was an elected official, despite there not being any “traditional victims” in her case.

The judge asked more than once: “Who are the victims?”

The prosecutors argued the entire community was victimized when someone they voted into office commits perjury, even in their private life. The judge didn’t agree.

U.S. District Judge Lydia Kay Griggsby took into “significant” account that this was Mosby’s first arrest and that she’s a mother of two daughters, who were present in court.

“It has weighed heavy on this court that you’re a mother,” Griggsby said.

Mosby received time served for each of the three convictions, plus 100 hours of community service and a year of home confinement with a location monitoring device.

Tears and applause flooded the courtroom before Mosby brought a white cloth napkin to her face to catch her tears at the defense table.

Her youngest daughter read a statement outside the court thanking her mom’s supporters.  Mosby also thanked everyone for their support.

Next month will mark 10 years since Mosby became the youngest person in the U.S. elected to lead a prosecutor’s office.

She was convicted last year for making an early withdrawal from her own retirement account by using a temporary COVID financial hardship provision under false pretenses to purchase a condo in Florida. She was also convicted of making false statements on a mortgage application about the source of some funds to lock in a lower interest rate.

Throughout the legal proceedings, the facts of her case have either been misrepresented or confusing in some news reports. Read on as Capital B breaks it all down.

Were COVID-relief funds stolen?

No.

Mosby was not among the over 2,200 businesses, agencies, celebrities, and others who collectively stole billions of federal COVID-19 relief funds.

She was originally charged in January 2022 on a four-count indictment, but tried separately and in a different part of Maryland as per her request to get a fair trial.

“The indictment is more telling for what is not in the indictment, rather than what is in there,” A. Scott Bolden, Mosby’s defense attorney, said at the time. The charges are “a far cry from criminal tax evasion and tax-related charges that were at the heart of this federal investigation.”

Her ex-husband, Nick Mosby, blames himself for her financial and legal troubles, but he hasn’t been charged with any wrongdoing. No tax-related charges were included in the indictment, despite several references about Mosby’s and her ex-husband’s taxes in the court documents.

As the months drew closer to Mosby’s first trial, her financial situation shifted drastically, especially after losing her third term. She couldn’t afford a private defense team and expert witnesses to assist in her case. The judge assigned a public defender after she proved her indigent status.

Mosby was convicted by two separate federal jury panels.

First, for two-counts of perjury. Mosby was convicted for lying about why she needed to make two hardship withdrawals from her own retirement account — the city of Baltimore’s Deferred Compensation Plan — that totaled $90,000. She said the COVID-19 pandemic put her travel company, Mahogany Elite Consulting LLC., that she launched in 2019, into the red before it could get started.

Prosecutors countered Mosby’s financial woes to her gross salary in 2020 as Baltimore City state’s attorney that was over $247,000 and never was reduced, according to the indictment. Prosecutors at trial said Mosby’s travel business didn’t have any clients. Mosby provided business log expenses at trial.

On the second indictment, Mosby was convicted of making false statements on one mortgage application about where she received a $5,000 gift to lock in a lower interest rate for a condo in Longboat Key, Florida, near Sarasota.

As part of the application, Mosby responded that she received the monetary gift from her now ex-husband and former president of the Baltimore City Council. According to the evidence presented at trial, Mosby did not receive a $5,000 gift from anyone, but rather she transferred $5,000 to her ex, and he then transferred the funds back to her.

The jury acquitted Mosby of making false statements on another application for an eight-bedroom home in Kissimmee near Disney World that she sold in Nov. 2021.

Then-Baltimore City State’s Attorney Marilyn Mosby (center) leaves a January 2022 press conference in Baltimore where she delivered a statement about her indictment by a federal grand jury on perjury charges. (Michael Robinson Chavez/The Washington Post via Getty Images)
Then-Baltimore City State’s Attorney Marilyn Mosby (center) leaves a January 2022 press conference in Baltimore where she delivered a statement about her indictment by a federal grand jury on perjury charges. (Michael Robinson Chavez/The Washington Post via Getty Images)

Have others been prosecuted for similar actions?

Fidelity Investments is one of the nation’s largest mutual fund companies, with 25.8 million participants. In 2020, 22% of their members took money out of their retirement accounts and 1,419,000 used the CARES Act hardship provision as a reason for withdrawing funds, according to a July 2021 Congressional Research Services report. Vanguard, the fourth-largest retirement fund company in the country with 5.5 million participants, had 5.7% receive a COVID-related distribution.

That provision allowed participants to make an early withdrawal of up to $100,000 without paying the usual 10% tax penalty on the condition that COVID-19 caused an adverse financial consequence. Those reasons include: being laid off, reduced work hours, unable to work due to lack of child care; you or a loved one was diagnosed with COVID; or the closing or reduction of hours of a business they owned or operated.

The federal government argues that Mosby did not have any of those side effects of the pandemic because she maintained her position and salary as the chief prosecutor of Baltimore. Mosby has an ailing grandmother who raised her and is in hospice at home in their hometown of Boston.

Regardless, Mosby “met an objective standard to qualify for the withdrawal,” according to a letter addressed to President Joe Biden that was co-signed by 15 national civil rights, justice, and advocacy organizations on May 7. “In contrast,” the letter noted and trial testimony revealed, in Maryland, “739 individuals withdrew funds from their retirement accounts without being charged for improper withdrawals, including three within her agency.”

The letter asks Biden to pardon Mosby. It’s rare, but not unheard of, for a president to disregard the five-year-waiting period before entertaining a presidential pardon application.

Was she really facing up to 40 years?

Mosby had long maintained that she did “nothing wrong.” She faced up to five years in federal prison for each perjury conviction and up to 30 years or $1 million in fines for one count of making a false mortgage application.

It was at Griggsby’s discretion whether Mosby would receive the maximum or minimum sentence, and if each convicted charge will run concurrently or consecutively.

There isn’t a standalone federal criminal statute for mortgage fraud.

“Thus, almost every legal actor relies on the FBI’s definition of mortgage fraud. Surprisingly, however, the influential FBI definition is plainly inconsistent in key respects with elements of the federal criminal statutes most often used to punish mortgage fraud,” according to Georgetown University’s American Criminal Law Review.

To create a mortgage fraud indictment against Mosby, prosecutors applied different federal criminal penal laws, including perjury and one statute that defines what a financial institution does, to create a case of mortgage fraud.

“We should be concerned that the FBI, which investigates mortgage fraud, cannot get the basic definition of the crime of mortgage fraud right — and that scholars and commentators uncritically accept and use that problematic definition,” the law review article stated.

And since the COVID provision connected to Mosby’s mortgage fraud conviction was temporary, there isn’t a precedent to predict how Mosby’s case will conclude.

In the prosecutor’s sentencing recommendation, it cited the prosecution of another former Baltimore city official, who pleaded guilty in 2018 for failing to file individual tax returns, and still received 10 months in prison.

This story has been updated.

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