Official indicted for CARES Act hardship retirement plan withdrawals

The CARES Act provisions that allowed for early withdrawals from retirement plans for people experiencing financial hardships resulting from the pandemic no doubt helped thousands, if not millions, of people.

But as is the case with any such freedom, some folks are accused of trying to game the system.

That’s the case with Marilyn Mosby, Baltimore State’s Attorney, who last week was accused of withdrawing $40,000 and $50,000 from the City of Baltimore’s 457(b) Deferred Compensation Plans.

Mosby certified that she met at least one of the requirements for early distribution under the CARES Act, according to an indictment filed in the U.S. District Court for the District of Maryland. Those requirements include having work hours reduced, not being able to obtain childcare or having a business she owned or operated closed or open for reduced hours.

The problem?

At the time Mosby withdrew the money, she was receiving her full gross salary of $247,955.58, and had received a salary increase in May 2020, according to the indictment.

And, the indictment charges, Mosby used at least some of the money for a down payment on Florida vacation property.

Additional charges allege that she made false statements in obtaining Florida mortgages by, among other things, failing to disclose that she had a lien placed on all of the property she owned because she and her husband owed more than $45,000 in federal taxes, according to the indictment.

Mosby’s attorney this week defended the withdrawals.

“I’m telling you she’s not only innocent, but we have professionals who she consulted with. She qualified under the statute,” Mosby’s attorney, A. Scott Bolden, said at a news conference Monday, according to the Baltimore Sun.

Mosby previously had incorporated three businesses that were aimed at providing Black families who often cannot afford to travel the opportunity to travel at reasonable rates.

So, did those businesses suffer as a result of the pandemic? No, they were not open yet.

“These were businesses that were starting.,” Bolden said, according to the Sun. “As a result, that does not disqualify her from, along with some other facts that we have to present, that certainly absolve her of any wrongdoing.”

Mosby supporters have accused the Justice Department of a witch hunt.

Others are not so sure.

“That’s it?” Baltimore Sun columnist Dan Rodricks wrote this week. “That’s Marilyn Mosby’s defense? She tapped into her tax-deferred retirement savings in 2020 because private companies that she established just the year before faced financial hardship due to the pandemic — even though said companies had not conducted any business? That’s all she’s got?”