86-Year-Old Ex-Attorney Given 5 Years Probation for Crypto Ponzi Fraud Involvement

Who says digital crimes are only for the young?

David Kagel, an 86-year-old former California attorney, has been sentenced to five years of probation and ordered to pay nearly $14 million in restitution for his role in a multimillion-dollar crypto Ponzi scheme.

Kagel, who pleaded guilty to conspiracy to commit commodity fraud in May, was sentenced on 8 October by Judge Gloria Navarro in Las Vegas Federal Court.

Currently in hospice care in Las Vegas due to his declining health, Kagel will serve his probation at the facility, and if his condition improves, he will be required to wear a monitoring device when outside.

How Did the Crypto Ponzi Scheme Transpired?

The court's ruling follows Kagel's involvement in a crypto Ponzi scheme, which he and two accomplices, David Saffron and Vincent Mazzotta, ran from December 2017 to June 2022.

The trio lured investors into a fraudulent cryptocurrency trading bot programme, falsely promising high returns with minimal risk.

Prosecutors revealed that the scheme raised approximately $15 million from unsuspecting victims.

As a key player, Kagel used his law firm's official letterhead to create an illusion of legitimacy, convincing investors they were engaging in a secure venture.

Many were swayed by his professional standing, trusting the promises of 20% to 100% returns within 30 days.

The scheme further relied on claims that automated bots would handle trades, minimising risk.

In one case, Kagel falsely claimed to hold 1,000 BTC worth $11 million in escrow to back investors' funds.

He also misled investors into believing he had a history of successful cryptocurrency investments.

Prosecutors emphasized that Kagel's role was central to the scam's promotion and success, which continued for years before being uncovered by authorities.

Legal Consequences of the Crypto Fraud

Though Kagel has accepted his role in the Ponzi scheme and received his sentence, the legal battle continues for his accomplices.

Saffron and Mazzotta, who have pleaded not guilty, are scheduled to stand trial in a Los Angeles federal court in April 2025.

If convicted, they too could face severe penalties for their involvement.

Kagel's troubles, however, go beyond this case.

His law license was revoked by the California Supreme Court in 2023 after he failed to respond to disciplinary charges—his third time facing license issues following suspensions in 1997 and 2012.

His pattern of professional misconduct, culminating in his role in the Ponzi scheme, reveals a persistent disregard for ethical and legal standards.

As the adage goes, actions have consequences—even when your time is running short.