365Crypto
David Kagel, an 86-year-old ex-lawyer, has been sentenced to five years of probation for running a $15 million cryptocurrency Ponzi scheme. He’ll serve his probation at a senior living center in Las Vegas and must wear a tracking device if he leaves the facility.
The Ponzi Scheme
Kagel pleaded guilty in May to conspiracy to commit commodity fraud for his part in the scam, which ran from December 2017 to June 2022. Together with two partners, he tricked investors into putting money into a bogus cryptocurrency trading program by promising huge returns—up to 100%—in just 30 days, and assuring them their initial investments were safe.
How It Worked
Instead of making real profits, Kagel and his team used money from new investors to pay off older ones, which is a typical Ponzi scheme. This left many investors with heavy losses. In total, the scheme raked in around $15 million.
Fake Bitcoin and Forged Documents
Kagel used his status as a lawyer to gain people’s trust, even going as far as forging letters on his law firm’s stationery to make the operation seem legitimate. In 2018, he falsely claimed to own 1,000 bitcoins—worth $11 million at the time—as a guarantee for investors.
His law license was revoked in 2023 after he didn’t respond to charges for misusing $25,000 in client money. He had also been suspended twice before, in 1997 and 2012, for other violations.
Probation Details
Kagel, who is currently in hospice care, will be on probation at a senior living home in Las Vegas. If he leaves the facility, he must wear a monitoring device. His co-conspirators, David Saffron and Vincent Mazzota, have pleaded not guilty and are set to face trial in April 2025 in Los Angeles.
