City, scheme figure do business

Sapperstein, convicted in bilking of school system, sells Pigtown buildings for $260,700


He has been convicted of conspiracy, bribery and theft, but Gilbert Sapperstein, a former boiler company owner and longtime liquor license broker who participated in a scheme to steal nearly $3.3 million from the Baltimore school system, is still doing business with the city.

The Board of Estimates yesterday approved a payment of $260,700 to Sapperstein for properties he owns in the 900 block of Washington Blvd. in the Pigtown neighborhood.

The board's action sealed a real estate deal that city officials say was in the works long before Sapperstein was convicted for his role in bilking the school system. The city had little choice but to deal with Sapperstein, said Mayor Martin O'Malley, a member of the Board of Estimates, the body that holds the city's purse strings.

O'Malley appeared puzzled when a reporter asked him about Sapperstein but commented after being reminded about his past.

"We weren't doing it because we wanted to help him out," O'Malley said of the deal. "We were doing it because we wanted to get the properties fixed up, keep them from being neighborhood blights and get them back on the tax rolls."

Sapperstein's properties -- a bar called Cammie's Place and a rowhouse -- have been widely viewed as impediments to redeveloping Pigtown. Neighbors have complained to the city liquor board about the bar, which has been closed for nearly three years, and had asked that its liquor license be voided under a state law that requires inactive licenses to expire after 180 days, or 360 days in the case of financial or personal hardship.

"[Sapperstein] had a proven history of failing to meet the neighborhood's needs," said Jack Danna, manager of the Washington Boulevard Main Street Program.

Officials with the Baltimore Development Corp., the city's economic development arm, said a check could be prepared for Sapperstein as soon as next week. He has controlled dozens of liquor licenses and taverns over the years and runs a bar vending machine business called Star Coin Machine Co.

Sapperstein, 74, of Green Spring Valley, is perhaps best known for his role in a scheme to steal more than $3 million from the city school system. As part of a plea deal worked out with the state prosecutor's office, Sapperstein, the former owner of All-State Boiler Services Inc., pleaded guilty last year to working with Rajiv Dixit, the school system's former facilities manager, to submit fraudulent work invoices that netted him and Dixit millions of dollars over a dozen years.

Dixit was sentenced to five years in prison. Sapperstein, who repaid $3.3 million to the school system plus $200,000 in interest, was sentenced to 18 months in prison in August but was released on home detention about a month later. He was paroled Feb. 23.

"I am sorry that he did that to the school system, don't get me wrong," said Mary Pat Fannon, director of the BDC's Baltimore Main Streets Program, which is working with Pigtown residents to rebuild the neighborhood. "But it doesn't change what we do legally."

BDC officials say they sought two appraisals on the properties and threatened to seize them through eminent domain if Sapperstein refused to sell. He didn't. And, according to Fannon, he was extremely accommodating.

"He was the most cooperative property owner that we had," Fannon said. "He's been very pleasant. It was really a breath of fresh air."

Sun reporter John Fritze contributed to this article.

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