Million-Dollar Launderer Sentenced to Three Years
Richard Charles Appelbaum III will serve three years behind bars for his part in a scheme to launder ill-gotten gains from a business email compromise scam.
Appelbaum pleaded guilty to conspiracy to commit money laundering in August, admitting to conspiring with six other people to move the money into cryptocurrency. The money Appelbaum laundered largely derived from fraud, including business email compromise scams.
In addition to his 36-month prison sentence, Appelbaum was ordered to pay $2,309,329.38 in restitution to the six people he defrauded, according to the court’s judgment.
A Labyrinthine Scheme
Appelbaum committed the fraud through a series of bank transactions geared to transform stolen money into cryptocurrency.
Starting in February 2022, Appelbaum began corresponding with someone on Facebook Messenger referred to in court documents as “S.W.” S.W. claimed to work for the company Coins2Trade, according to Appelbaum’s plea agreement. Six months later, in August 2022, S.W. introduced Appelbaum to someone called E.S. in court documents, who was a purported “big player in crypto” who also worked with Coins2Trade.
E.S. described Coins2Trade as a company that processed cryptocurrency for people who could not purchase their own because of their geographical location, according to the plea agreement. E.S. hired Appelbaum to be Coins2Trade’s investment banker. As a part of his job, Appelbaum would receive and convert big-dollar wire transfers into cryptocurrency for a 3% commission fee.
E.S. trained Appelbaum from August 2022 to October 2022 via phone calls and messages on WhatsApp, with training taking place in the middle of the night between 10 pm and 3 am CST, according to the plea documents.
During the training, E.S. instructed Appelbaum to create various business entities and open multiple business and personal bank accounts at different companies, prosecutors say. Appelbaum was also advised to open numerous cryptocurrency accounts in his name. Appelbaum created at least 24 bank accounts under his name.
Between February 2022 and January 2023, Coins2Trade used multiple businesses to further its scheme, scheme with names like MGA Global Enterprises LLC, APM Management Services LLC and JMD Consultant Services LLC, according to the plea agreement. The companies purportedly dealt in real estate, boating supplies, life skills consulting and auto purchasing consulting services, though they didn’t perform them. Though the businesses were fake, the Coins2Trade team used them to make large wire transfers.
Appelbaum met three other members of the Coins2Trade team, and in January 2023, Appelbaum recruited someone called A.G. in court documents to process the cryptocurrency transactions for 2.5% in commission, earning about $20,000 a month, according to the plea agreement.
Business Email Compromise Scam
To fund their scam, the Coins2Trade team would email businesses, pretending to be an existing vendor with the company, according to the plea agreement. The team would then instruct the businesses to use an alternate wiring transfer method for payment. Once they received the payment in one of the many bank accounts that Appelbaum controlled, he would convert it to cryptocurrency.
Prosecutors identified 34 wire fraudulent transfer payments, which added up to $8,344,287.57, according to the plea agreement.
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