David Kagel, an 85-year-old disbarred attorney formerly based in Beverly Hills, has pleaded guilty to his involvement in a cryptocurrency Ponzi scheme that defrauded investors of over $9.5 million. Kagel and his co-conspirators promoted an investment program that falsely promised high returns through cryptocurrency trading bots and claimed that Kagel held $11 million in Bitcoin as a guarantee against losses. To build trust, Kagel provided fraudulent letters on his firm’s letterhead, which misled victims into believing their investments were secure.
The scheme, which began around 2018, falsely assured investors of substantial profits and used Kagel’s professional reputation to gain credibility. In reality, the funds collected from victims were diverted for personal use by Kagel and his accomplices, including private luxuries and other personal expenses. Kagel admitted to using the money for his own benefit rather than investing it as promised.
Principal Deputy Assistant Attorney General Nicole M. Argentieri highlighted the severity of Kagel’s actions, emphasizing how lawyers’ involvement in fraudulent schemes can lead to significant financial harm for victims. Special Agent in Charge Tyler Hatcher from the IRS Criminal Investigation praised the agency’s role in uncovering the scheme and bringing those responsible to justice.
Kagel faces a maximum of five years in prison when sentenced on September 10. His co-conspirators, David Gilbert Saffron and Vincent Anthony Mazzotta Jr., are also facing charges related to the same Ponzi scheme and are awaiting trial. The case underscores ongoing efforts by law enforcement to address complex financial fraud and protect investors.
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