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Disbarred California Lawyer Pleads Guilty in $9.5 Million Cryptocurrency Ponzi Scheme
Disbarred California attorney David Kagel has pleaded guilty in connection with a cryptocurrency Ponzi scheme. Stock photo by Activedia/Pixabay
May 29 (UPI) — Disbarred California attorney David Kagel pleaded guilty Tuesday to conspiring to operate a cryptocurrency Ponzi scheme that stole more than $9.5 million from victims, the Department of Justice.
Kagel, 85, a former Beverly Hills lawyer, he pleaded guilty to one count of criminal conspiracy to commit fraud in goods with a maximum sentence of five years.
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The prosecution said Kagel and his accomplices… David Gilbert Saffron, of Australia, and Vincent Anthony Mazzotta Jr., of Los Angeles – promoted investment programs that falsely guaranteed huge returns and promised to use artificial intelligence to trade to benefit victims of the cryptocurrency market.
Kagel falsely told victims he had $11 million in collateral against losses to give victims a false sense of security, supported by letters on his letterhead, authorities said, adding that, ultimately, Kagel and his co-conspirators they used the funds collected from the victims for their own personal use.
“David Kagel abused his position as an attorney to gain the trust of investors and to support false claims about a purported cryptocurrency investment that was, in fact, a scam,” Principal Deputy Assistant Attorney General Nicole Argentieri said in a statement .
“Kagel and his co-conspirators defrauded their victims of millions of dollars and used the victims’ money to line their own pockets. When lawyers give a veneer of legitimacy to fraudulent schemes, it can lead to devastating losses for victims. “
According to the website The BlockKagel was disbarred from the state bar of California in 2023. He was admitted to the bar in 1974 but had his license suspended for six months for making false statements to the Securities and Exchange Commission in 1988.
He also faced investigations in 2009 and 2022.
“Kagel exploited people’s trust through a complex scheme to separate people from their hard-earned money,” said IRS Special Agent in Charge Tyler Hatcher.