Businessman gets 18 months in schools bribery

August 25, 2005|By Lynn Anderson | Lynn Anderson,SUN STAFF

Gilbert Sapperstein apologized yesterday for his role in a scheme to steal more than $3.3 million from the city school system - but the grandfather and businessman received little sympathy as he was sentenced to 18 months in jail.

"I made a mistake, and I embarrassed my family," said Sapperstein, who pleaded guilty in May to conspiracy, bribery and theft. In a plea deal with the state prosecutor's office, Sapperstein, 72, a Green Spring Valley resident and owner of All State Boiler Service Inc., also agreed to pay back the stolen money.

Baltimore Circuit Judge John M. Glynn snapped back at Sapperstein: "It's not sufficient to say it was a mistake. It's a crime ... and that's why you are going to jail."

FOR THE RECORD - An article yesterday about the sentencing of Gilbert Sapperstein for his role in a scheme to steal more than $3.3 million from the Baltimore schools system misidentified the place of residence of George McDermott. McDermott, who sought to file a victim-impact statement in the case, lives in Forest Heights in Prince George's County.
The Sun regrets the errors.

Sapperstein admitted to paying bribes to a city schools employee in exchange for fraudulent work orders that netted the business owner millions of dollars in extra revenue.

In court yesterday, he wrote checks to those he wronged, including city schools Chief Executive Officer Bonnie S. Copeland. She collected $3.5 million for the system, the sum stolen plus 6 percent interest. The check to the city Department of Public Works totaled $138,084, the sum Sapperstein stole from that agency as part of a similar scheme involving inflated work invoices.

Sapperstein also wrote a check for $250,000 to the CollegeBound Foundation, which helps city youths attend college, and paid $120,000 in fines, the maximum under state law.

Minutes after his apology, Sapperstein was handcuffed by a sheriff's deputy and escorted out of the courtroom.

Two men - Donald Stone, a former Ocean City resident who now lives in Florida, and George McDermott of Forest Hill in Harford County - asked to file victim-impact statements yesterday as part of the state prosecutor's case against Sapperstein, but Glynn rejected their requests.

Officials with the prosecutor's office said later that the men's statements were based on allegations unrelated to the city schools case.

Sapperstein - dressed in khaki pants, a crisp white shirt and sailing shoes - had no comment as he was led away.

Besides his boiler business, Sapperstein also runs a bar vending firm called Star Coin Machine Co. He is a longtime liquor license broker.

The Baltimore City Board of Liquor License Commissioners has focused its attention recently on license brokers, who lend bar owners money at a high interest rate and then take over their licenses if they default on the loans.

State law requires that inactive liquor licenses expire after 180 days, or a maximum of 360 days with a hardship extension. But Sapperstein and other brokers have held on to dormant licenses for years in some cases, according to liquor board records. Sapperstein is currently trying to sell two licenses that appear to violate the 180-day rule. Court records show he has had control of dozens of licenses over the years.

The state prosecutor's office is also investigating the liquor board. Last week, a city grand jury served the state agency with a subpoena seeking thousands of documents, including payroll information, personnel files and inspection reports for Power Plant Live and Norma Jean's, a strip bar on The Block.

State prosecutor Robert A. Rohrbaugh declined to discuss the liquor board case yesterday, and he would not say whether Sapperstein's liquor license dealings are a part of that investigation.

Sapperstein is one of seven people convicted in the city schools scheme, which was carried out between January 1991 and April 2003.

The investigation was launched last year after school officials notified the state prosecutor's office that they had discovered a potentially corrupt employee in the facilities department. The state prosecutor investigates cases of corruption by public officials.

Also convicted in the case was Rajiv Dixit, a longtime facilities and maintenance supervisor who helped Sapperstein - whose boiler company had a contract with the school system - submit fraudulent work invoices. In exchange, Dixit got a third of the stolen funds.

Dixit also received $300,000 in bribes from Melvin Duklewski and his son James Duklewski for helping them steal more than $800,000 from the system in a separate scheme.

The Duklewskis pleaded guilty this year to charges of conspiring to defraud the system for their part in selling unnecessary water-conditioning equipment to schools.

As a result, Melvin Duklewski has been ordered to repay the school system $347,000, money he has yet to produce, assistant state prosecutor Steven Trostle said yesterday, adding that a lien had been placed on the elder man's house. James Duklewski paid $42,000, Trostle said. Both men received suspended jail sentences at hearings in January and March.

For his part in both schemes, Dixit has agreed to pay the school system about $500,000 and forfeit another $500,000 worth of personal assets, Trostle said. Dixit is set for sentencing Oct. 28.

Also convicted in the scheme involving Sapperstein were Ida Marie Beran, a bookkeeper for All State Boiler; Arthur Lester Holtz Jr., a foreman for the firm; and Cecil Thrower, a former employee of the city's Department of Public Works.

They are scheduled to be sentenced Sept. 1, said Trostle. Beran is expected to be fined $25,000. Holtz and Thrower are expected to pay $5,000 each.

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