Maryland Man Pleads Guilty to His Role in a Bank Fraud Scheme to Steal More Than $1.5 Million from Victims Throughout the United States

Baltimore, Maryland – Theodore Sapperstein, age 66, of Pikesville, Maryland, pleaded guilty today to conspiracy to commit bank fraud.  

The guilty plea was announced by Erek L. Barron, United States Attorney for the District of Maryland and Postal Inspector in Charge Carroll N. Harris of the U.S. Postal Inspection Service – Los Angeles Division.

According to his guilty plea, Sapperstein and his coconspirators unlawfully debited money from the bank accounts of unknowing victims throughout the United States without their authorization, created shell companies, and falsely represented that debits against consumer-victims’ bank accounts were authorized as payment for services allegedly provided by those shell companies.

The unauthorized debits against consumer-victim accounts resulted in returned transactions and high return rates that could generate scrutiny from banks.  To both conceal and continue making unauthorized debits, Sapperstein and his coconspirators caused “micro debit” transactions (i.e., a large number of low-value sham transactions) to be made against other bank accounts that they controlled and/or funded, and which they knew would not result in returns.  The “micro debits” were therefore used to artificially lower return rates to levels that Sapperstein and his coconspirators believed would reduce bank scrutiny and potential termination of banking services.  Sapperstein helped broker payment processing for the fraud scheme, securing a payment processor who processed the unauthorized debits and the fraudulent micro debits.  As part of his guilty plea, Sapperstein admitted that more than $1.5 million in loss was reasonably foreseeable to him.

“We formed the Maryland Financial Intelligence Task Force to identify financial fraudsters, whose actions impact victim-account holders here in Maryland and beyond,” said United States Attorney Erek L. Barron.  “Our goal is to aggressively protect the financial information of public consumers.”

“Those who knowingly participate in schemes to use personal and financial information about American consumers to steal money from their accounts will be held accountable,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “We are committed to investigating and prosecuting individuals who facilitate such schemes.”

“The U.S. Postal Inspection Service will not tolerate schemes aimed at draining the accounts of innocent people trying to create financial stability for themselves and their families,” said Inspector in Charge Carroll N. Harris for USPIS. “Postal Inspectors along with their law enforcement partners will tirelessly investigate these crimes, ensuring these criminals face the maximum penalties for their illegal activities.”

Sapperstein faces a maximum of 30 years in federal prison for conspiracy to commit bank fraud.   U.S. District Judge Deborah K. Chasanow has scheduled sentencing for August 15, 2024, at 11:00 a.m.

U.S. Attorney Erek L. Barron and Principal Deputy Assistant Attorney General Brian M. Boynton commended the U.S. Postal Inspection Service for its work in the investigation and thanked the U.S. Attorney’s Office for the Central District of California for its assistance in the prosecution of the case.  Mr. Barron also thanked Assistant United States Attorney Darryl Tarver and Trial Attorneys Wei Xiang, Meredith Healy, and Amy Kaplan of the Justice Department’s Consumer Protection Branch, who are prosecuting the case.

For more information on the Maryland U.S. Attorney’s Office, its priorities, and resources available to help the community, please visit https://www.justice.gov/usao-md and https://www.justice.gov/usao-md/community-outreach.

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