86-Year-Old Lawyer Sentenced to Pay $14M for Crypto Ponzi Scheme

09-10-2024 By: Sakshi Jain

86-Year-Old Lawyer Pleads Guilty to $14M For Crypto Ponzi Scheme

An 86-year-old former California attorney, David Kagel, has been sentenced to five years of probation and instructed to pay nearly $14 million for his involvement in running a multi-million-dollar cryptocurrency Ponzi scheme. Las Vegas federal court judge, Gloria Navarro, imposed the sentence after Kagel pleaded guilty in May to one count of conspiracy to commit commodity fraud.

Health and Probation Terms

Due to Kagel’s declining health, he will serve his probation in hospice care at a seniors’ facility in Las Vegas, unless he leaves, in which case he must wear a monitoring device.

Despite his age and health issues, the severity of the crime led prosecutors to seek judgment, as Kagel's actions defrauded numerous victims over nearly five years.

Details of the Scheme

From December 2017 to June 2022, Kagel, along with two accomplices, David Saffron, and Vincent Mazzotta, promoted a fraudulent crypto trading bot scheme, which falsely promised investors high returns with minimal risk. The scheme successfully lured victims into investing approximately $15 million in various cryptocurrency programs, only for most funds to be lost.

Kagel and his co-conspirators used his law firm’s letterhead to add a false sense of credibility to their fraudulent letters. Victims were led to believe their investments were secured by a Bitcoin wallet containing 1,000 BTC, which Kagel falsely claimed was worth $11 million.

Kagel’s Legal Troubles and Disbarment

Kagel’s legal career has been marred by repeated disciplinary actions. In 2023, the California Supreme Court revoked his law license after he failed to respond to charges of misappropriating $25,000 in client funds. His law license had previously been suspended twice, in 1997 and 2012, due to similar issues.

Co-Conspirators Await Trial

Both of Kagel’s alleged accomplices, David Saffron and Vincent Mazzotta, have pleaded not guilty to the charges and are awaiting trial in a Los Angeles federal court next April. Their involvement in the scheme is still under legal scrutiny.

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