⚖ 86-Year-Old Ordered to Pay $14M After Running Crypto Ponzi

An 86-year-old former attorney from California, David Kagel, has been sentenced to five years probation and slapped with nearly $14 million in restitution after confessing to orchestrating a crypto Ponzi scheme.

Kagel, who is in hospice care due to severe health issues, will serve out his probation at his Las Vegas seniors facility. If his condition improves and he leaves the facility, he will be required to wear a monitoring device. Kagel, along with two accomplices, lured investors into a fraudulent crypto trading bot scheme, falsely promising guaranteed returns of 20% to 100% within just 30 days. The group managed to pull in $15 million in victim investments between December 2017 and June 2022.

Kagel's role was critical, as he used his legal credentials to draft letters on his law firm’s official letterhead, giving the scam a false air of legitimacy. Victims were led to believe they were investing in a genuine crypto trading program that utilized automated bots to generate high returns with no risk.

In one case, Kagel claimed to have 1,000 Bitcoin (worth $11 million) held in escrow to reassure investors. He also lied about his prior crypto investments to gain their trust. Kagel's law license has been revoked by the California Supreme Court after failing to respond to disciplinary charges. This isn’t his first legal misstep—his license was also suspended twice in the past, in 1997 and 2012.

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