86-year-old man to pay $14 million after admitting to running crypto Ponzi scheme
An 86-year-old former California attorney has been sentenced to five years in prison and ordered to pay nearly $14 million in restitution after pleading guilty to running a multimillion-dollar crypto Ponzi scheme.
David Cagel was sentenced Oct. 8 by Las Vegas federal court Judge Gloria Navarro after pleading guilty to one count of conspiracy to defraud in May.
Cagel is currently in hospice care at a nursing home in Las Vegas, where he will be required to wear a monitoring device unless he gets out, where he will serve his probation.
State prosecutors – who indicted Kagel last year – said that between December 2017 and June 2022, Kagel and two accomplices defrauded victims into investing in a crypto bot trading scheme with promises of high profits and no risk.
Prosecutors say Kagel helped defraud people in a Bitcoin Ponzi scheme. Source: CourtListener
During this period, the trio “fraudulently promoted and solicited investments and received at least $15 million in victim-investor funds for various cryptocurrency trading programs,” prosecutors said.
Kagel helped promote the crypto scam by drafting letters on the law firm's mailing list, which were then sent to victims.
The official letters helped build trust, prosecutors said.
Victims were under the impression that they were investing in a legitimate scheme that used trading bots to invest in the crypto markets.
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The program offers a “guarantee” to pay back the original investment and 20% to 100% of the original investment within 30 days.
Kagel claimed that in January 2018 he had 1,000 bitcoins (BTC) in his wallet worth $11 million, which was actually held to protect investments. The broker also falsely claimed to have invested in crypto before to help the trust.
In the year In 2023, the California Supreme Court revoked Cajal's law license after he failed to respond to a disciplinary complaint alleging he misappropriated $25,000 in client funds.
His law license was previously suspended twice, in 1997 and once in 2012.
David Saffron and Vincent Mazzotta, both of Cajele's accomplices, have pleaded not guilty and await trial in Los Angeles federal court next April.
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