An 86-year-old former California attorney, David Kagel, has been sentenced to five years of probation and a whopping $14 million in restitution after admitting his role in a multimillion-dollar crypto Ponzi scheme.
The sentence, handed down on October 8 by Las Vegas Federal Court Judge Gloria Navarro, follows Kagel’s guilty plea in May to a conspiracy charge of committing commodity fraud.
Currently in a seniors hospice facility in Las Vegas due to his deteriorating health, Kagel will serve his probation there unless his health improves, in which case he will be closely monitored with a tracking device.
Federal prosecutors detailed the scheme, revealing that from December 2017 through June 2022, Kagel and two accomplices masterminded a deceptive crypto bot trading scheme.
They targeted victims with promises of high returns and no risk, luring them into investing large sums. According to the authorities, the fraudulent operation swindled over $15 million from unsuspecting investors during this period.
Kagel’s involvement went beyond simple promotion; he used his law firm’s official letterhead to draft documents that helped the scheme appear legitimate.
This tactic convinced victims they were investing in a legitimate trading bot venture, guaranteed to deliver massive returns—ranging from 20% to 100%—within just 30 days.
In January 2018, Kagel falsely claimed to possess 1,000 Bitcoins, valued at $11 million, held in escrow to secure the investments. He also falsely asserted his previous success in crypto investments to gain trust.
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The fallout was severe. In 2023, Kagel lost his law license after the California Supreme Court revoked it due to his failure to respond to disciplinary charges involving the misappropriation of $25,000 in client funds. His license had already faced suspensions twice before, in 1997 and 2012, showcasing a history of legal trouble.
As for Kagel’s co-conspirators, David Saffron and Vincent Mazzotta, they have pleaded not guilty and are awaiting trial in Los Angeles federal court, set for next April.
