An 86-year-old former attorney, David Kagel, has been sentenced to five years of probation for orchestrating a multimillion-dollar cryptocurrency Ponzi scheme that defrauded investors out of nearly $15 million.
Kagel, who pleaded guilty to one count of conspiracy to commit commodity fraud, was ordered to pay $14 million in restitution to his victims. The sentence was handed down by U.S. District Judge Gloria Navarro in a Las Vegas federal court on October 8.
The scheme, which ran from December 2017 to June 2022, involved enticing investors with promises of high returns and minimal risk from a cryptocurrency bot trading program. Kagel and his two accomplices lured victims with claims of guaranteed profits between 20% and 100% within 30 days and full repayment of principal.
However, the scheme was a Ponzi scheme, with new investors’ funds being used to pay off earlier ones. Kagel, leveraging his legal background, forged documents to make the scheme appear legitimate and falsely claimed to own 1,000 bitcoins.
Kagel will serve his probation at a senior living facility in Las Vegas and must wear a monitoring device if he leaves. His co-conspirators, David Saffron and Vincent Mazzota, are awaiting trial in Los Angeles.