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

In Brief:

David Kagel, an 86-year-old former attorney, received a five-year probation sentence and must pay nearly $14 million after admitting to running a crypto Ponzi scheme.

Kagel and his accomplices defrauded victims of at least $15 million through a fraudulent crypto trading bot scheme, promising high returns with no risk.

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86-Year-Old to Pay $14M After Admitting to Running Crypto Ponzi Scheme

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David Kagel, an 86-year-old former attorney from California, has been sentenced to five years of probation and ordered to pay nearly $14 million after pleading guilty to conspiracy to commit commodity fraud. The sentencing, delivered by Las Vegas federal court judge Gloria Navarro, follows Kagel's admission of running a multimillion-dollar crypto Ponzi scheme.

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Kagel, currently in hospice care at a seniors facility in Las Vegas, will serve his probation there unless he leaves, in which case he must wear a monitoring device. Prosecutors charged Kagel last year, revealing that between December 2017 and June 2022, he and two accomplices lured victims into a fraudulent crypto bot trading scheme, promising high returns with no risk.

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Fraudulent Scheme and Legal Consequences

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The scheme defrauded victims of at least $15 million, with Kagel using his law firm's letterhead to promote the scam and build trust. Victims believed they were investing in a legitimate trading bot that guaranteed returns of 20% to 100% within 30 days. Kagel falsely claimed to hold 1,000 Bitcoin in escrow to secure investments and misrepresented his crypto investment history to gain trust.

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In 2023, the California Supreme Court revoked Kagel's law license for misappropriating $25,000 in client funds, following previous suspensions in 1997 and 2012. Kagel's accomplices, David Saffron and Vincent Mazzotta, have pleaded not guilty and await trial in Los Angeles next April.

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