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Disbarred California Lawyer Pleads Guilty to Crypto Ponzi Scheme
David Kagel pleaded guilty to conspiring to operate a crypto Ponzi scheme that defrauded victims of more than $9.5 million.
Kagel, 85-year-old disbarred former lawyer, confessed to participating in fraudulent cryptocurrency operation Ponzi scheme in which he and his partners deceived investors with promises of high profits and the use of AI-based trading bots.
According to a Press release from the Office of Public Affairs, Kagel and his partners falsely claimed that Kagel, as the promoter’s attorney, held $11 million in Bitcoin (Bitcoin) in guarantee to guarantee investments.
“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,” said Deputy Assistant Attorney General Nicole Argentieri, Chief of the Division criminal justice department. . “Kagel and his co-conspirators robbed their victims of millions of dollars and used the victims’ money to line their own pockets.”
Kagel wrote misleading letters on his company letterhead to support the fraud. He and his co-conspirators admitted to using the funds raised from the victims for their own gain.
“When lawyers give a veneer of legitimacy to fraudulent schemes, it can lead to devastating losses for victims,” Argentieri said.
Kagel pleaded guilty to one count of conspiracy to commit commodity fraud and faces a maximum sentence of five years.
The State Bar of California disbarred David Kagel in 2023 for alleged mismanagement of client funds and other actions.
Accomplices
David Gilbert Saffron of Australia and Vincent Anthony Mazzotta Jr. of Los Angeles were charged in December 2023 for their roles in the same scheme. They allegedly promoted these fraudulent investment programs under names such as Circle Society, Bitcoin Wealth Management, Omicron Trust, Mind Capital and Cloud9Capital.
According to the press release, instead of investing in cryptocurrencies, Saffron and Mazzotta used the funds to pay for personal expenses such as private jets, luxury hotels, villa rentals, a personal chef and private security guards.
They are awaiting the trial which will begin on August 13th.