Millions said lost in fraud of schools
Owner of boiler company charged with $3 million theft
Bribery scheme alleged from '91 to '03
Man also charged with stealing $130,000 from city department

SUN STAFF

Ryan Davis and Michael Hoffman
Published on March 19, 2005
© 2005- The Baltimore Sun

The owner-operator of a boiler company has been accused of defrauding
the city public schools of more than $3 million and the city public
works department of more than $130,000, the state prosecutor announced
yesterday.

Gilbert Sapperstein, 72, of Green Spring Valley was charged with two
counts each of felony theft, conspiracy to commit theft, bribery and
conspiracy to commit bribery, said State Prosecutor Robert A. Rohrbaugh.
If convicted, Sapperstein could be sentenced to more than 100 years in
prison and fined thousands of dollars, as well as have to pay millions
in restitution. The charges handed down yesterday by a city grand jury
stem from an investigation of All State Boiler Co. and its involvement
with city schools and the city public works department. The
investigation has yielded several convictions and prosecutors said it is
ongoing.

Yesterday's indictment against Sapperstein alleges that he bribed
Rajiv Dixit, the former schools maintenance manager. The indictment
alleges that he then conspired with Dixit, who has been charged with
embezzlement, to steal millions of dollars from the school system. The
alleged illegal activity occurred between January 1991 and April 2003.

Dixit has been accused of embezzling more than $150,000 and helping
another contractor steal more than $140,000. He is awaiting trial.

The other contractor, who runs an industrial flooring company, has said
that Dixit demanded "commissions" from his company or the school
district might take its business elsewhere.

School system spokeswoman Vanessa Pyatt declined to comment yesterday on
the charges. Sapperstein could not be reached for comment, and no one
answered phone calls to All State, located in the 100 block of W.
Hamburg St.

The charges related to the city Department of Public Works alleged that
Sapperstein conspired with two All State employees and a city worker to
steal more than $130,000. The alleged conspiracy occurred from September
1998 to July 2004.

The state prosecutor's office said the charges against Sapperstein stem
from the same investigation that led to convictions this year against
All State workers Arthur Lester Holtz Jr. and Ida Marie Beran, as well
as Cecil Thrower of the city public works department. All three are
cooperating in the case against Sapperstein, Rohrbaugh said.

Thrower has admitted that he routinely signed off on inflated invoices
from All State for work the company did at a city wastewater treatment
plant. In exchange, he received $1,500 to $2,000 in kickbacks between
September 1998 and last July.

Beran, an All State bookkeeper, has admitted to submitting false invoices.

School officials have previously said their contract with All State
expired in February.

The city had two contracts with the company, said spokeswoman Raquel
Guillory. One never resulted in any work orders and has been terminated.
The other was for citywide boiler work and expired in January, Guillory
said.
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