U. S. Attorney Sayler A. Fleming | U.S. Department of Justice
U.S. District Judge Rodney W. Sippel has sentenced Richard Charles Appelbaum III, 40, from Maryland Heights, to three years in prison for his role in laundering millions obtained through fraud schemes. He is also ordered to repay $2.3 million.
Appelbaum pleaded guilty in August to one count of conspiracy to commit money laundering. He admitted working with at least six others to transfer funds from fraud victims into cryptocurrency.
In 2022, Appelbaum was introduced to an individual identified as “E.S.” in his plea agreement, described as a significant figure in cryptocurrency. E.S. recruited Appelbaum as an "investment banker" for Coins2Trade, a cryptocurrency transaction processor. Appelbaum was promised a 3% commission for converting U.S. currency into cryptocurrency.
From August 2022 to October 2022, E.S. trained Appelbaum through WhatsApp messages and phone calls during late-night hours. E.S. instructed him to create businesses and open various bank and cryptocurrency accounts under his own name while keeping the nature of the transactions hidden from bank personnel.
Appelbaum recruited another person for processing cryptocurrency transactions and established multiple business entities with co-conspirators. These businesses falsely claimed involvement in auto purchasing consulting, boating supplies, real estate management, and life skills consulting on corporate documents to appear legitimate when receiving large wire deposits.
Between February 2022 and April 2023, they opened at least 24 business bank accounts used for receiving proceeds from Business Email Compromise (BEC) wire fraud schemes where criminals infiltrated victims' email accounts to divert payments. At least 36 individuals and entities were defrauded this way between February 2022 and February 2023.
One instance involved a title company in Florida that received fraudulent instructions via email on December 12, 2022, to wire $2.2 million in escrowed funds to one of Appelbaum's accounts. Appelbaum later misled the title company's lawyer by claiming he was owed the money for consulting services.
The criminal proceeds were transferred from business accounts to personal bank accounts and then moved onto cryptocurrency trading platforms, concealing their origins or control.
Appelbaum acknowledged laundering at least $3.5 million this way during the conspiracy period. He and his co-conspirators received at least 34 wire transfers totaling $8.3 million from victims of BEC fraud or online romance scams.
The FBI conducted the investigation with Assistant U.S. Attorney Kyle Bateman prosecuting the case.
