UPDATE 3-Baltimore mayor indicted for perjury, theft

(Adds statement from Maryland governor in paragraph 10)

By Jon Hurdle

PHILADELPHIA, Jan 9 (Reuters) - A grand jury indicted Baltimore Mayor Sheila Dixon on 12 counts of perjury, theft and fraud on Friday, saying she used gift cards intended for poor families to buy herself a fur coat and other presents.

"The citizens of Baltimore have every right to expect their public officials will be open and honest and will not use the office for personal motives, gain or greed," Maryland State Prosecutor Robert Rohrbaugh said in a statement.

Dixon, 55, a Democrat who is the northeastern U.S. city's first woman mayor, said she had done nothing wrong.

"I am being unfairly accused," she said in a statement. "Time will prove I have done nothing wrong and I am confident that I will be found innocent of these charges."

Among other charges, the indictment says Dixon received gifts including travel and lodging, and used gift cards intended to be given to needy families at Christmas time to purchase items for herself, including a fur coat.

The indictment says Dixon received gift cards to the Best Buy and Target stores from two unnamed real estate developers. The Baltimore Sun newspaper reported that one of the developers was Ronald Lipscomb, her former boyfriend, who was indicted on Wednesday on charges of bribery.

In December 2005, one of the developers gave her 20 cards, of which Dixon used 19 to buy a camcorder, a Sony PlayStation 2 and other electronic devices "for her personal benefit," the indictment says.

A year later, she received more gift cards for distribution to needy families but used them to buy more electronics, clothes and other items for herself, the indictment says.

Dixon has been the target of a three-year investigation by Rohrbaugh focusing on allegations that she used her office to give valuable contracts to favored individuals, the newspaper said.

Democratic Maryland Gov. Martin O'Malley, Dixon's predecessor, said in a statement that "Baltimore has made solid progress" with her as mayor.

"This is a tough day for all of us who care about Baltimore's progress, and for Mayor Dixon and her family," he said. "It is my sincere hope that all of these long drawn-out matters will soon be resolved in a court of law once all the facts are known."

The indictment of Lipscomb accuses him of paying $12,500 to an unnamed third party on behalf of Helen Holton, a member of Baltimore City Council, who was herself accused of bribery, perjury and malfeasance by the same grand jury.

Lipscomb, a partner in a number of real estate development projects in Baltimore during 2007, was seeking city tax incentives for one of the projects in which he was a partner, the indictment alleges. (Editing by Patricia Zengerle)