Due to his advanced age and poor health, prosecutors requested that crypto scammer David Kagel be placed on five years of probation.
An 86-year-old former California lawyer admitted to running a multimillion-dollar cryptocurrency Ponzi scheme and was given a five-year probationary term and required to pay over $14 million.
After entering a guilty plea in May, David Kagel was sentenced on one count of conspiracy to commit commodity fraud in a ruling made by Judge Gloria Navarro of the Las Vegas Federal Court on October 8.
Due to his failing health, Kagel is presently receiving hospice care at a Las Vegas senior living facility. Unless he is able to leave, he will complete his probation there and be obliged to wear a tracking device.
Prosecutors opinion:
From December 2017 to approximately June 2022, Kagel and two accomplices deceived victims into engaging in a fake cryptocurrency bot trading scam by promising large returns and no risk, according to government prosecutors who prosecuted Kagel last year.
Prosecutors claimed that throughout this period, the three “fraudulently solicited and promoted investments and obtained at least approximately $15 million in victim-investor funds for various cryptocurrency trading programs.”
By writing letters on the letterhead of his legal company and sending them to victims, Kagel contributed to the spread of the cryptocurrency hoax.
Prosecutors claimed that the official letterheads contributed to the development of trust.
The victims believed they were engaging in a genuine program that invested in cryptocurrency markets using trading bots.
The plan “guaranteed” that the primary investment would be repaid within 30 days, along with a profit of 20% to 100% of the initial investment.
Kagel stated in January 2018 that 1,000 Bitcoin BTC tickers totaling $61,803.89, or $11 million, were kept in escrow to secure investments. In order to boost broker trust, he also made up the fact that he had previously made cryptocurrency investments.
The California Supreme Court terminated Kagel’s legal license in 2023 after he failed to address disciplinary proceedings alleging that he had embezzled $25,000 from clients.
He had previously experienced two suspensions of his law license, in 1997 and 2012.
David Saffron and Vincent Mazzotta, Kagel’s two suspected accomplices, entered not guilty pleas and will stand trial in a federal court in Los Angeles in April.
