As a seasoned crypto investor who has seen the highs and lows of this rapidly evolving market, I cannot help but feel a sense of dismay when stories like that of David Kagel surface. The audacity of some individuals to exploit the trust and aspirations of others for their own selfish gain is simply astounding.
California lawyer David Kagel, who was disbarred, consented to repay approximately $14 million to victims as part of his sentencing for managing a massive cryptocurrency Ponzi scheme that swindled investors across multiple years by misrepresenting investments in digital currencies.
As a crypto investor, I recently learned that an 86-year-old attorney named David Kagel admitted guilt and was sentenced to five years of probation by a federal court judge in Las Vegas. He’s also required to pay a hefty sum of $13.94 million as a financial penalty for his part in a Ponzi scheme that allegedly defrauded victims out of approximately $15 million.
Currently residing in a senior home in Las Vegas for health reasons and under hospice care, Kagel will complete his probation under tight surveillance. If he leaves the facility, he’ll need to wear a tracking device.
Previously known for his professional integrity as a lawyer, Kagel’s downfall is signified by his involvement in masterminding a crypto Ponzi scheme that ran from December 2017 to June 2022. Together with his associates, he deceived victims with false assurances of high returns with negligible risks and the enticing prospect of AI-powered trading bots.
By leveraging his law firm’s credibility, Kagel orchestrated a scheme to deceive investors, amassing millions in ill-gotten gains. He created an image of legitimacy that disguised the fraudulent business he was involved in. The unfortunate victims were lured by promises of returns as high as 100% within merely 30 days after investment.
Kagel misrepresented himself by saying he had 1,000 Bitcoins (equivalent to $11 million at the time) safely kept aside as a guarantee for investors’ safety of their funds. In addition, prosecutors allege that he was dishonest about his background in cryptocurrency investments.
In 2023, Kagel was permanently banned from practicing law by the California State Bar due to charges of misusing client funds and ignoring numerous disciplinary proceedings. This event signified the conclusion of a turbulent legal career that had previously resulted in two suspensions of his license – once in 1997 and another time in 2012. According to official records, this is the truth behind his actions.
In December 2023, David Gilbert Saffron from Australia and Vincent Anthony Mazzotta Jr. of Los Angeles were indicted for their involvement in a fraud case, but both have denied the charges and are now waiting for their upcoming trial.
Surge in crypto fraud
Over time, fraudulent crypto activities like scams and Ponzi schemes have developed in complexity, emerging as a persistent problem. In just the year 2024, numerous instances of these deceitful practices managed to swindle millions from unsuspecting investors, attracted by the excitement surrounding cryptocurrency investments.
In June, it was decided in an American court that Sam Ikkurty and his company, Jafia LLC, were running a Ponzi scheme. They lured investors by making false assurances of high, consistent returns and overstating their trading abilities. However, the money from new investors was actually used to repay earlier ones, while the rest was misused for personal gain.
In a similar vein, Aiden Pleterski, a well-known Canadian figure in the crypto world, was accused of fraud and money laundering last May. The allegations stem from an alleged Ponzi scheme where he is said to have garnered $40 million from 160 investors under false promises of investing their funds in cryptocurrency and foreign exchange markets.
Just weeks prior to that, the FBI uncovered a multi-year Ponzi scheme that defrauded victims of $43 million using similar tactics.
Read More
Sorry. No data so far.
2024-10-09 13:05