David Kagel, an 85-year-old disbarred attorney from California, pled guilty to operating a crypto Ponzi scheme that defrauded victims of over $9.5 million. The scheme, which misled investors with promises of high profits and AI trading bots, involved Kagel and his partners falsely claiming to hold $11 million in Bitcoin as security.
The Department of Justice revealed that Kagel abused his legal position to gain trust and endorse false statements, leading to significant financial losses for victims. Disbarred in 2023 for mismanagement of client funds, Kagel now faces up to five years in prison for conspiracy to commit commodity fraud.
Accomplices David Gilbert Saffron and Vincent Anthony Mazzotta Jr. also face charges. They allegedly used victims’ funds for personal luxuries instead of investing in crypto. Their trial is set for August 13.
This case highlights the severe risks of fraudulent schemes, especially when legitimized by trusted professionals. It underscores the need for vigilance and robust regulatory measures in the cryptocurrency investment space.
