- The Washington Times - Thursday, May 19, 2005

The owner of a boiler repair company has pleaded guilty to defrauding Baltimore city schools of more than $3.3 million and must pay roughly $4 million in restitution within the next 90 days, state officials said yesterday.

“One of the major goals of our investigation has been to obtain as much restitution for city schools as possible,” State Prosecutor Robert A. Rohrbaugh said. “I think the kids deserve it.”

Prosecutors said Gilbert Sapperstein, 72, of Green Spring Valley, will pay more than $3.5 million to the school system and more than $138,000 to the city. He also will pay a $120,000 fine, donate $250,000 to a nonprofit group and serve 18 months in jail.

Sapperstein, owner of All-State Boiler Service, was charged with eight counts of conspiracy, bribery and theft. While repairing boiler systems for public schools from 1991 to 2003, prosecutors said, he inflated invoices by adding employee names to work orders.

Prosecutors have also indicted Rajiv Dixit, a former facilities and maintenance supervisor for the school system. They say the bills were routed through Mr. Dixit and that he also hired All-State employees to work at his gas station, then billed their time to the school system. His case is scheduled for a June 27 trial.

Prosecutors said Sapperstein, the sixth person convicted so far in a yearlong investigation, worked a similar scheme under a contract with Baltimore city. They say he bribed a manager at a municipal water-treatment facility to authorize inflated service bills.

As part of Sapperstein’s plea agreement, he will cooperate in an ongoing probe into how school funds were misused or stolen, Mr. Rohrbaugh said.

“We intend to pursue every lead,” he said.

Sapperstein’s lawyer said his client will have the money by the deadline.

Officials said the restitution will help the school system continue to improve its financial situation.

Last year, city officials approved a $42 million loan to help the system overcome a $58 million deficit and a separate, $58 million cash-flow shortfall.

“We are pleased with the agreement reached and the investigation that resulted in the return of the funds taken from the district,” said Bonnie S. Copeland, the school system’s chief executive officer. “We are currently developing a plan to make sure the funds are used in such a way that they will benefit the children of Baltimore city.”

Rick Abbruzzese, a spokesman for Baltimore Mayor Martin O’Malley, said the school system will eliminate 60 percent of its deficit this year, with the remaining 40 percent to be eliminated next year.

“It was a tough year last year, but the school system is on track,” he said. “We’re happy the matter is resolved.”

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