Former attorney David Kagel, 85, has pleaded guilty to operating a cryptocurrency Ponzi scheme, defrauding victims of over $9.5 million. Kagel, once a respected legal figure in Beverly Hills, California, now faces up to five years in prison.

Kagel was accused of colluding with co-conspirators to entice victims into a fraudulent crypto investment scheme, promising high-yield profits. The scheme involved false assurances, including claims that AI trading bots were used to manage investments in cryptocurrency markets.

Kagel, acting as the promoter’s attorney, falsely assured victims that he was holding Bitcoin worth roughly $11 million in escrow as a guarantee to protect their investments. He also issued letters on his law firm’s letterhead to falsely confirm the legitimacy of the investment programs.

Principal Deputy Assistant Attorney General Nicole M. Argentieri stated that Kagel had exploited his attorney status to gain investors’ confidence and endorse false assertions regarding a cryptocurrency investment, which was a scam.

Kagel’s guilty plea marks a significant development in the ongoing investigation. His sentencing is scheduled for September 10. Kagel has also admitted that he and his co-conspirators used victims’ funds for personal gain. Meanwhile, David Gilbert Saffron of Australia and Vincent Anthony Mazzotta Jr. of Los Angeles await their August 13 trial for their alleged roles in the same crypto Ponzi scheme.