Former lawyer convicted of organizing fraudulent crypto scheme
October 09, 2024
A federal court in Las Vegas sentenced 86-year-old David Kagel to five years of probation and ordered him to pay $14 million in compensation for orchestrating a fraudulent cryptocurrency scheme.
Given Kagel's advanced age and health condition, the court ruled that he will serve his probation in a hospice for the elderly in Las Vegas. A monitoring device will be placed on him to track his movements.
Fraudulent cryptocurrency scheme
According to the prosecution, from December 2017 to June 2022, Kagel, along with accomplices, lured investors into a cryptocurrency pyramid scheme. He promised extraordinarily high returns — from 20% to 100% per month — while ensuring the investments carried no risk.
To create an appearance of legitimacy, Kagel used official letterheads from his law firm, on which he drafted letters to potential victims. This helped gain investors' trust and attract at least $15 million.
False claims
In January 2018, Kagel claimed to own 1,000 BTC, allegedly held in an escrow account as a guarantee for the investments. He also misled investors by stating he had extensive experience in cryptocurrency investments.
In 2023, the California Supreme Court revoked Kagel's law license due to his failure to respond to disciplinary charges and the unlawful appropriation of $25,000 of client funds.