86-year-old ordered to pay $14M after crypto Ponzi scheme

David Kagel, an 86-year-old former California attorney, has been sentenced to five years probation and ordered to pay nearly $14 million after admitting to his involvement in a multimillion-dollar cryptocurrency Ponzi scheme. 

The judgment, issued on October 8 by Las Vegas federal court judge Gloria Navarro, follows Kagel’s guilty plea to one count of conspiracy to commit commodity fraud in May.

Due to his declining health, Kagel is currently receiving hospice care at a senior facility in Las Vegas, where he will serve his probation unless he leaves the facility. 

If he does, he will be required to wear a monitoring device. Prosecutors sought a lenient sentence for Kagel, given his advanced age and fragile health condition.

Between December 2017 and June 2022, Kagel, along with two accomplices, defrauded investors through a crypto bot trading scheme, promising high returns with no risk. 

Prosecutors revealed that the trio “fraudulently promoted and solicited investments” in various cryptocurrency trading programs, obtaining at least $15 million from victims.

Kagel played a key role in promoting the scam by drafting official letters on his law firm’s letterhead, which were sent to investors, creating an illusion of legitimacy. 

Investors believed they were participating in a legitimate trading program that used bots to generate high profits from cryptocurrency markets, with guaranteed profits of 20% to 100% within just 30 days.

In 2023, Kagel’s law license was revoked by the California Supreme Court after he failed to respond to disciplinary charges. 

His license had also been suspended twice in the past, in 1997 and 2012. 

Both of Kagel’s accomplices, David Saffron and Vincent Mazzotta, pleaded not guilty and are scheduled to stand trial in Los Angeles federal court in April 2024.