- An 86-year-old former attorney was sentenced to five years probation for defrauding investors in a crypto Ponzi scheme.
- The scheme defrauded victims of nearly $15 million, promising high returns with no risk through a bot trading program.
- Kagel’s accomplices, who have pleaded not guilty, are awaiting trial in Los Angeles next April.
An 86-year-old former attorney from California, David Kagel, has been sentenced to five years probation after admitting to his involvement in a multimillion-dollar cryptocurrency Ponzi scheme. The sentence, delivered on October 8 by Las Vegas Federal Court Judge Gloria Navarro, also includes a mandate for Kagel to repay nearly $14 million to victims.
Crypto Ponzi Scheme Targets Investors
According to federal prosecutors, Kagel and two accomplices defrauded victims between 2017 and 2022 by promoting a fraudulent cryptocurrency trading scheme. They lured investors with promises of high returns, claiming their investments were managed by a bot trading system with no risk involved. The scam collected over $15 million in funds from victim investors.
To build trust, Kagel used his law firm’s letterhead to promote the scheme, falsely assuring investors of the program’s legitimacy. Prosecutors noted that Kagel claimed to hold 1,000 Bitcoin in escrow, valued at $11 million at the time, as a guarantee for the investments.
Kagel’s law license had been revoked by the California Supreme Court in 2023 after previous disciplinary issues, including misappropriating client funds. He had also faced suspensions in 1997 and 2012. Currently in hospice care due to his health, Kagel will serve his probation under supervision and wear a monitoring device if he is able to leave the facility.
