Marilyn Mosby trial: Prosecutors present ‘tax fraud’ evidence; FBI accountant continues testimony

BALTIMORE — Federal prosecutors on Monday put on evidence that Marilyn Mosby’s own lawyer characterized as “tax fraud” as the government sought to solidify its case against the former Baltimore state’s attorney, and prepare for her forthcoming defense.

On Monday, an FBI forensic accountant testified that Mosby counted expenses she incurred in her personal life and while acting in her capacity as the city’s top prosecutor as costs of operating allegedly inoperable businesses she incorporated while in office.

Going line-by-line through a spreadsheet of Mosby’s company expenses, the accountant, Jenna Bender, testified most entries weren’t what they purported to be and, in fact, were incurred in a non-business capacity.

In one instance, for example, Mosby listed costs associated with a trip to Phoenix, Arizona for her travel business but Bender could find only one other expense matching the cost: It was actually for a suite in Washington, D.C., related to a conference about fair prosecution. There were several other examples, including trips to cities in America and abroad.

“Does this appear to be related to the travel industry?” Assistant U.S. Attorney Sean Delaney asked of one expense.

“No,” Bender responded.

In reference to one of Mosby’s trips, which she listed as a business expense, Delaney asked Bender who arranged the travel.

“An employee with the state’s attorney’s office,” the accountant responded.

The prosecution leafing through Mosby’s purported business expenses line by line seemed to undercut Mosby’s defense.

Indicted in January 2021, Mosby is charged with two counts of perjury. She is accused of falsely claiming financial hardship because of the coronavirus to enable her to obtain two early withdrawals from her city retirement savings under the CARES Act, Congress’s sweeping pandemic relief package. She used the approximately $80,000 to purchase a pair of vacation properties in Florida, the indictment states.

Where prosecutors accuse Mosby of lying to take advantage of laws intended to help people suffering from the pandemic, her attorneys contend their client was innocent because her travel businesses were “devastated” by the coronavirus — businesses that Mosby, on several occasions, claimed publicly to be inoperable.

“Ms. Mosby believed she experienced an adverse financial consequence,” Assistant Federal Public Defender Maggie Grace told the jury Monday. “Ms. Mosby never lied.”

Bender testified Mosby benefited in 2020, when she made the CARES Act withdrawals, from the companies by way of a tax deduction, rather than experiencing losses.

In a mid-trial legal argument over Bender’s testimony, Federal Public Defender James Wyda requested the judge prohibit the prosecution from arguing about “tax fraud” in front of the jury.

Mosby is not charged with tax fraud, and her previous defense lawyers have said the Internal Revenue Service declined to pursue tax charges against Mosby.

The testimony, Delaney said during the legal debate outside of the jury’s presence, was intended to show “double counted expenditures,” which cuts to the core of the defense’s case.

During opening statements, Delaney told jurors to “stay laser-focused on the certifications the defendant made.”

“How can a business close if it was never operable?” Delaney said. “How can a business suffer reduced business hours if it had no clients?”

The accountant continued to answer prosecutors’ questions Tuesday.

After the prosecution finishes its case, the defense is expected to begin presenting evidence and witnesses. Mosby is likely to testify.

The defense could put on several other witnesses, including Shelonda Stokes, president of the Downtown Partnership of Baltimore; former Mosby campaign manager Sharif Small; and former Baltimore State’s Attorney’s Office Communications Director Zy Richardson.

The perjury trial is taking place at the federal courthouse in Greenbelt after Mosby’s lawyers won a legal argument to move the case citing concerns that potential jurors in the area the Baltimore courthouse pools from harbor more bias against Mosby. The defense lawyers cited extensive media coverage of Mosby and her case in the Baltimore area.

Mosby, who served two terms as Baltimore’s top prosecutor, was also indicted on mortgage fraud charges. Accused of making false statements on loan applications for the Florida properties, Mosby is expected to be tried on those charges at a later date.

Prosecutors say she neglected to disclose federal tax debts and claimed she was going to use an eight-bedroom house near Disney World as a second home, when she had arranged to operate it as a rental — a maneuver that locked in a lower interest rate.

U.S. District Judge Lydia Kay Griggsby placed limits on how prosecutors can characterize the way she used the money she is charged with obtaining by perjury, but the jury in the current trial has heard evidence that she purchased the pair of properties in Florida, including their costs, with money she got from the CARES Act withdrawals.

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