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.
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.
Revolut, the digital banking app, reported blocking over $621 million in potentially fraudulent transactions involving both crypto and fiat currencies during 2023.
FTX has filed a motion to settle with Caroline Ellison, the former Alameda Research CEO, requiring her to relinquish nearly all her assets.
Marat Tambiyev, the former chief investigator of Russia’s Investigative Committee, has been sentenced to 16 years in prison due to corruption charges.
On October 4, 2024, the U.S. government took legal steps to recover over $2.67 million in digital assets that were allegedly pilfered by North Korea’s Lazarus Group.