By David Kagel, a now disbarred 85-year-old Beverly Hills attorney on hospice care, pleaded guilty to an elaborate, years-long crypto ponzi scheme on Wednesday.
Former Attorney On Hospice Care Facing 5 Years In Prison
According to a press release from the Department of Justice, Kagel and two co-conspirators promoted non-existent crypto investment programs and promised high-yield results to investors thanks to the use of AI trading bots.
A promoter for the massive crypto ponzi scheme alleged that Kagel held over $11 million in escrow that would guarantee victims’ investments “against loss for any reason,” with the now disgraced former attorney going so far as to craft professional documents to verify the promoter’s claims fraudulently.
David Kagel, an 85-year-old, recently-disbarred attorney who practiced law in Beverly Hills, pleaded guilty to one count of conspiracy to commit commodity fraud for his role in a $9.5 million cryptocurrency Ponzi scheme https://t.co/DwGccJIwL9 pic.twitter.com/K62DArh4v4
— Reuters Legal (@ReutersLegal) May 30, 2024
“Kagel preyed on trusting individuals through a complex scheme to separate people from their hard-earned money,” said Special Agent in Charge Tyler Hatcher of the IRS Criminal Investigation (IRS-CI)’s Los Angeles Field Office.
In total, Kagel and his co-conspirators defrauded investors of an estimated $9.5 million in order to ultimately use it “for their own personal benefit.”
“David Kagel abused his position as an attorney to earn the trust of investors and to endorse false statements about a purported cryptocurrency investment that was, in fact, a scam,” said Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division. “Kagel and his co-conspirators defrauded their victims out of millions of dollars and used the victims’ money to line their own pockets.”
Crypto Ponzi Scheme Co-conspirators To Stand Trial This Summer
Los Angeles native Vincent Anthony Mazotta Jr. and Australian citizen David Gilbert Saffron are slated to stand trial this August for allegedly promoting the digital asset fraud under several different entity names.
“Rather than investing victims’ funds in cryptocurrency, Saffron and Mazzotta allegedly misappropriated victims’ funds to pay for personal expenses including private chartered jet flights, luxury hotel accommodations, private mansion rentals, a personal chef, and private security guards,” the Department of Justice claimed.
Kagel has faced a string of disciplinary charges as an attorney over the years. His license was fully revoked in 2022 following claims that he misappropriated thousands of dollars of customer funds.
The now disgraced former attorney, who revealed in October court documents that he was receiving hospice care in a Las Vegas facility, has pled guilty to one count of conspiracy to commit commodity fraud and is facing a maximum sentence of five years in prison.
He is expected to be sentenced on September 10.
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