U.S. District Judge Rodney W. Sippel has sentenced Richard Charles Appelbaum III to three years in prison for his role in laundering millions of dollars obtained through fraud schemes. Appelbaum, 40, from Maryland Heights, was also ordered to repay $2.3 million.
Appelbaum pleaded guilty in August to conspiracy to commit money laundering. He admitted working with at least six others to convert funds from fraud victims into cryptocurrency.
In 2022, Appelbaum was introduced to "E.S.", described as a significant figure in cryptocurrency. E.S. offered him a position at Coins2Trade, a cryptocurrency transaction processor, promising a 3% commission for converting U.S. currency into cryptocurrency.
From August to October 2022, E.S. trained Appelbaum via WhatsApp and phone calls, instructing him on creating businesses and opening various bank accounts under his name for transactions. E.S. advised against disclosing dealings with cryptocurrency to bank personnel and suggested daily use of debit cards linked to the accounts for legitimacy.
Appelbaum recruited another individual for processing cryptocurrency transactions and formed multiple business entities with co-conspirators. These entities falsely claimed involvement in diverse sectors like auto purchasing consulting and real estate management to appear legitimate when receiving large wire deposits.
Between February 2022 and April 2023, they opened at least 24 business bank accounts across financial institutions. These accounts were used for Business Email Compromise (BEC) wire fraud schemes where criminals infiltrated victims’ email accounts to redirect payments.
One instance involved a title company in Florida receiving fraudulent instructions on December 12, 2022, to wire $2.2 million in escrowed funds to one of Appelbaum’s accounts. Appelbaum falsely claimed the money was owed for consulting services during legal proceedings.
The proceeds were moved from business accounts to personal ones before being transferred to cryptocurrency trading platforms, intending to conceal their origin or control.
Appelbaum acknowledged that at least $3.5 million was laundered this way and that he received over $8.3 million through wire transfers related to BEC fraud or online romance scams.
The FBI investigated the case, which is being prosecuted by Assistant U.S. Attorney Kyle Bateman.