Disbarred California attorney pleads guilty to crypto Ponzi scheme

As an analyst with a background in financial fraud investigations, I find the case of David Kagel and his accomplices deeply troubling. The fact that an 85-year old disbarred attorney would stoop so low as to participate in a crypto Ponzi scheme, abusing his position of trust to defraud innocent investors out of millions of dollars, is both shocking and sad.

David Kagel admitted in court to being part of a cryptocurrency fraud conspiracy, which swindled over $9.5 million from unsuspecting victims.

An 85-year-old ex-lawyer named Kagel admitted to being involved in a deceitful cryptocurrency investment scam. Alongside his accomplices, they tricked investors by making false promises of substantial returns and employing the supposed use of artificial intelligence trading bots.

Based on information from the Office of Public Affairs’ press release, Kagel and his associates allegedly made a misrepresentation by stating that Kagel, functioning as the lawyer for the promoter, had custody of $11 million worth of Bitcoin (BTC) as a safety measure for investors.

“Deputy Assistant Attorney General Nicole Argentieri of the Justice Department’s Criminal Division stated that David Kagel misused his lawyer role to gain confidence from investors, promoting deceitful claims about a bogus cryptocurrency investment. In reality, this investment was a scam. Colluding with their accomplices, Kagel and his team swindled their victims out of huge sums of money, utilizing the stolen funds for personal enrichment.”

As a crypto investor, I’d put it this way: Kagel deceived me and other investors by sending out false letters using his company’s letterhead to further his fraudulent scheme. He and his accomplices confessed to using our hard-earned funds for their personal gain instead of investing them as promised.

When attorneys give a false appearance of lawfulness to deceitful plans, the consequences can be catastrophic for those unfairly affected, according to Argentieri.

Kagel admitted his guilt for one charge of attempting to deceive markets through commodity fraud, carrying a possible sentence of up to five years.

In 2023, the State Bar of California took disciplinary action against David Kagel by revoking his law license due to accusations of mishandling clients’ funds and engaging in other questionable conduct.


In December 2023, David Gilbert Saffron from Australia and Vincent Anthony Mazzotta Jr. of Los Angeles were accused of similar wrongdoings. They are suspected of marketing deceptive investment schemes using labels such as Circle Society, Bitcoin Wealth Management, Omicron Trust, Mind Capital, and Cloud9Capital.

Based on the information provided in the press release, Saffron and Mazzotta opted against allocating the funds towards cryptocurrency investments. Instead, they utilized these resources for their personal expenses. This included the use of private jets for travel, luxurious accommodations at hotels, renting mansions, engaging a personal chef to prepare meals, and securing private security services.

They are awaiting a trial that is scheduled to begin on August 13. 

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2024-05-30 00:03