Originally published on: October 09, 2024
An elderly former California attorney, David Kagel, has been handed a five-year probation sentence and a hefty fine of nearly $14 million after confessing to orchestrating a multi-million dollar cryptocurrency Ponzi scheme.
In a ruling issued on October 8th by Judge Gloria Navarro of the Las Vegas federal court, Kagel was sentenced following his guilty plea to a single count of conspiracy to commit commodity fraud in May.
Due to declining health, Kagel is currently under hospice care at a senior living facility in Las Vegas where he will serve his probation term. If he leaves the facility, he will be required to wear a monitoring device.
According to government prosecutors who pressed charges against Kagel last year, he, along with two partners, enticed victims with promises of high returns and zero risks to invest in a sham cryptocurrency bot trading program from December 2017 to June 2022. The trio managed to collect approximately $15 million from investors.
Kagel used his law firm’s letterhead to draft letters promoting the fraudulent scheme, which helped earn the victims’ trust. These letters misled investors into believing they were participating in a legitimate investment opportunity involving cryptocurrency trading bots.
The scheme purportedly guaranteed to return the principal investment along with profits ranging from 20% to 100% within 30 days. Kagel falsely claimed to hold 1,000 Bitcoins worth $11 million in escrow in January 2018 to secure investments and bolster credibility.
In a separate incident in 2023, Kagel lost his law license for failing to respond to disciplinary charges, including the misappropriation of $25,000 in client funds. His license had previously been suspended twice, in 1997 and 2012.
Kagel’s associates, David Saffron and Vincent Mazzotta, who are co-accused in the case, pleaded not guilty and are awaiting trial in a Los Angeles federal court scheduled for next April.
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