A Missouri man who helped launder millions of dollars obtained via fraud, including a business email compromise (BEC) wire fraud scheme involving a Florida title company, was sentenced to three years in prison and ordered to repay $2.3 million by U.S. District Judge Rodney Sippel.
Richard Appelbaum III, 40, of Maryland Heights, Mo., pleaded guilty in August to one count of conspiracy to commit money laundering. He admitted conspiring with at least six others to move millions of dollars obtained from fraud victims into cryptocurrency.
According to the U.S. Attorney’s Office, Eastern District of Missouri, Appelbaum was introduced to someone in 2022 identified in his plea agreement as “E.S.,” described as a “big player” in cryptocurrency.
E.S. offered to hire Appelbaum as an “investment banker” at Coins2Trade, a cryptocurrency transaction processor. Between August and October 2022, E.S. trained Appelbaum via WhatsApp messages and phone calls on how to create businesses, open business and personal bank accounts and open accounts at cryptocurrency exchanges under his own name and then provide the account information to E.S.
Appelbaum and other co-conspirators formed numerous business entities, falsely documenting the businesses would be involved in auto purchasing consulting, boating supplies, real estate management and life skills consulting. In reality, the accounts were used to receive profits from BEC scams.
Between February 2022 and February 2023, at least 36 individuals and entities were defrauded through BEC schemes, including a Florida title company. On Dec. 12, 2022, the title company received a fraudulent email with instructions to wire $2.2 million in escrowed funds to one of Appelbaum’s accounts. Appelbaum later lied to the title company’s lawyer and in a deposition in a civil suit, falsely claiming he was owed the money for consulting services, according to his plea agreement.
Appelbaum and other co-conspirators moved criminal proceeds from the business accounts to personal bank accounts, and then to accounts at cryptocurrency trading platforms. They received at least 34 wire transfers totaling $8.3 million from victims of the BEC fraud scheme or an online romance fraud scheme, Appelbaum’s plea agreement stated.