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California Lawyer Sentenced in Cryptocurrency Ponzi Scheme
(Originally posted on : Crypto News – iGaming.org )
David Kagel, an 86-year-old former attorney from California, has been sentenced to five years of probation for his involvement in a multimillion-dollar cryptocurrency Ponzi scheme. The sentencing, delivered by Judge Gloria Navarro in a Las Vegas federal court, took place in early October. Kagel, now in hospice care, will avoid prison due to his declining health but could face monitoring if his condition improves.
Deceiving Investors with False Promises
From December 2017 to mid-2022, Kagel, alongside two accomplices, convinced victims to invest in a fraudulent cryptocurrency trading bot. They promoted it as a high-return, low-risk opportunity, claiming investors could earn up to 100% in just 30 days. Prosecutors revealed that the group scammed at least $15 million from their investors. Kagel’s legal background played a crucial role in the deception. He used his law firm’s letterhead to reassure victims that their funds were secure and even falsely claimed to hold 1,000 Bitcoins worth $11 million in escrow.
Although his involvement was significant, Kagel won’t serve prison time due to his failing health. However, he has been ordered to repay nearly $14 million in restitution to the victims. Earlier this year, the California Supreme Court revoked Kagel’s law license, following past suspensions in 1997 and 2012. His accomplices, David Saffron and Vincent Mazzotta, pleaded not guilty and are expected to face trial in Los Angeles next April.