A Maryland man pleaded guilty Wednesday in Baltimore federal court to conspiracy to commit bank fraud, officials stated.
According to court documents, Theodore Sapperstein, 66, along with his accomplices, illicitly withdrew funds from the bank accounts of unsuspecting U.S. citizens without their consent.
Sapperstein, of Pikesville, and his cohorts established dummy corporations, falsely asserting that withdrawals from the bank accounts of their victims were authorized payments for services supposedly rendered by these fictitious entities.
These unauthorized withdrawals led to an influx of returned transactions and notably high rates of returns, which could draw attention from banking institutions.
To mask their activities and persist in their unauthorized withdrawals, Sapperstein and his associates orchestrated “micro debit” transactions—numerous low-value sham transactions—against other bank accounts under their control or influence, ensuring these transactions would not be reversed.
These “micro debits” artificially lower return rates to levels deemed less likely to arouse suspicion from banks or prompt the termination of banking services.
Sapperstein played a pivotal role in facilitating payment processing for the fraudulent scheme, arranging for a payment processor to handle both the unauthorized withdrawals and the deceitful micro debit transactions.
Sapperstein acknowledged that losses exceeding $1.5 million were foreseeable to him, according to officials.
“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 (USPIS) 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 of USPIS’ LA Division. “Postal Inspectors along with their law enforcement partners will tirelessly investigate these crimes, ensuring these criminals face the maximum penalties for their illegal activities.”
“We formed the Maryland Financial Intelligence Task Force to identify financial fraudsters, whose actions impact victim-account holders here in Maryland and beyond,” said U.S. Attorney Erek L. Barron for the District of Maryland. “Our goal is to aggressively protect the financial information of public consumers.”
A sentencing hearing is scheduled for Aug. 15.
Cases against related scheme participants have previously been filed in Los Angeles, San Diego, and Las Vegas.
In May 2023, a grand jury in Los Angeles returned an indictment in United States v. Courdy, et al. charging 14 defendants with RICO conspiracy and other charges in the Central District of California.
The indictment alleges that the defendants and associates debited consumer-victims’ bank accounts without authorization and used shell entities and “micro debits” to conceal the activity from banks. The “Information for Victims in Large Cases” section on the Consumer Protection Branch’s website contains additional information on United States v. Courdy, et al.
In December 2023, scheme participant Luis Ramirez pleaded guilty to conspiracy to commit access device fraud in federal court in San Diego, and is scheduled to be sentenced on April 22. A related scheme participant, Harold Sobel, pleaded guilty to bank fraud conspiracy in federal court in Las Vegas. In December 2022, Sobel was sentenced to 42 months in prison.
The U.S. Postal Inspection Service is investigating the case.
Trial Attorneys Wei Xiang, Meredith Healy and Amy Kaplan of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Darryl Tarver for the District of Maryland are prosecuting the case.
For more information about the Consumer Protection Branch and its enforcement efforts, visit www.justice.gov/civil/consumer-protection-branch. Consumer complaints may be filed with the FTC at www.reportfraud.ftc.gov/ or at 877-FTC-HELP. The Justice Department provides a variety of resources relating to fraud victimization through its Office for Victims of Crime, which can be reached at www.ovc.gov.