Towson lawyer charged with bank fraud conspiracy

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Federal prosecutors last week charged Towson real estate lawyer Jacob M. Rappaport with conspiracy to commit bank fraud, accusing him of faking numbers in deals for a Baltimore apartment building and dozens of houses.

According to a criminal information filed in federal court March 12 by the Maryland U.S. Attorney’s Office, Rappaport conspired with a client, Alexander Schultz, to defraud financial institutions by inflating the price of their purchases to secure more favorable terms.

Rappaport worked for Towson law firm Levin Gann for 14 years, and was promoted to partner at the beginning of 2019. He declined to comment on Monday. The firm immediately fired him.

Schultz pleaded guilty in January 2024 to conspiracy to commit bank fraud for the same deals, agreeing to the entry of a restitution order for nearly $850,000. The facts in his plea agreement and Rappaport’s criminal information are the same. His sentencing has been indefinitely suspended.

The maximum sentence for conspiracy to commit bank fraud is 30 years.

Schultz co-owned the real estate company Limitless Management; his co-owner is identified only as “Person #1.” In December 2021, Limitless Management sold the Coventry Manor apartment complex in Southwest Baltimore for about $6.9 million, but told “Bank B” that the price was $7.8 million. Rappaport is accused of preparing both the agreement between the parties and the bank and the side deal that was kept secret from the bank.

About $352,000 was allegedly sent to Rappaport’s attorney trust account; he kept $16,250 and transferred the rest back to the buyer.

The criminal information describes these as “material facts that should have been disclosed to Bank B.”

“The difference in the sale price was material to Bank B and was knowingly and purposely altered on the contract of sale,” it states.

Limitless Management was also in the business of “wholesaling” houses, buying large numbers of them below market rate and quickly reselling to a single buyer for a profit.

With Rappaport’s help, Schultz and his business partner bought 42 Baltimore homes and allegedly inflated their price in order to provide the buyer with 100% financing, because the buyer did not have the $2 million needed for closing costs.

The parties agreed to a $4.725 million deal, but told the lender that they had agreed to a price of $6.93 million. The settlement company wired $2.8 million to Rappaport’s trust account, and Rappaport transferred just over $2 million back to the buyer.

A criminal information is distinct from an indictment in that it comes directly from a prosecutor’s office, not from a grand jury.

Rappaport has not, at least yet, hired or been assigned an attorney, court records show.

Levin Gann fired him on Friday. His bio on the firm’s website has been removed.

“Levin Gann PA learned about the criminal charges against Mr. Rappaport on Friday and immediately terminated his relationship with the Firm,” a company spokesperson stated in an email.

“Importantly, the alleged conduct did not involve any misuse or mismanagement of client funds and our clients’ interests remain fully protected. The Firm will cooperate fully with the appropriate authorities. We remain focused on serving our clients with the integrity and professionalism which has defined our practice for more than a century.”