Ex-Attorney Sentenced for $14 Million Crypto Ponzi Scheme

A former California attorney, 86-year-old David Kagel, has received a five-year probation sentence and a nearly $14 million restitution order after admitting to orchestrating a crypto Ponzi scheme.

The ruling was made on October 8 by Judge Gloria Navarro in a Las Vegas federal court, following Kagel’s guilty plea in May for conspiracy to commit commodity fraud.

Kagel, who is currently in hospice care due to health issues, will serve his probation at a senior facility in Las Vegas. Prosecutors charged him with defrauding investors between December 2017 and June 2022, claiming they were investing in a legitimate cryptocurrency trading venture that promised high returns without risk. Instead, Kagel and his accomplices reportedly collected around $15 million from victims.

Using his law firm’s letterhead, Kagel crafted deceptive letters to instill trust among potential investors. He falsely claimed to possess 1,000 Bitcoin worth $11 million as collateral to assure investors.

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The California Supreme Court revoked his law license in 2023 for failing to respond to disciplinary charges, which included misappropriating client funds.

Two of his co-defendants, David Saffron and Vincent Mazzotta, have pleaded not guilty and are awaiting trial in Los Angeles next April.

Alexander Stefanov