As a seasoned investor with decades of experience under my belt, I have seen many scams and fraudulent schemes come and go. However, nothing quite compares to the audacity and longevity of this $15M Crypto Ponzi scheme masterminded by David Kagel.
A retired lawyer named David Kagel was given a five-year probation sentence due to his involvement in orchestrating a large-scale, cryptocurrency-based Ponzi scheme. This deceptive operation swindled investors out of approximately $15 million.
In a Las Vegas federal court on October 8, the ruling was made and filed, which not only convicted him but additionally mandates him to repay $14 million to those he harmed as part of the sentence.
$15M Crypto Ponzi Scheme
Following Kagel’s admission of guilt for conspiring to commit commodity fraud in May, U.S. District Judge Gloria Navarro imposed the resulting sentence.
Records show that this operation, active between December 2017 and June 2022, tricked investors by convincing them they were investing in a sophisticated cryptocurrency trading bot system that guaranteed substantial profits with virtually no risk.
As stated by the prosecution, Kagel and his two associates enticed victims with misleading promises of returns ranging from 20% to 100% in a mere 30 days. They guaranteed these prospective investors that their initial investments would be entirely returned to them.
By using false assurances and underhanded methods, the trio amassed approximately $15 million from unsuspecting investors in various cryptocurrency trading ventures.
On the contrary, rather than earning profits, those involved diverted money from new investors to repay earlier ones, mirroring a classic Ponzi scheme structure. Consequently, numerous victims endured substantial financial losses.
False Bitcoin Claims and Forged Documents
Through his skills as a lawyer, Kagel played a crucial role in earning the trust of the victims. By drafting letters using his law firm’s stationery, he gave the appearance of legitimacy to his plan.
In 2018, he made a misleading statement that he had 1,000 bitcoins valued at approximately $11 million, using this as collateral for investments. The ex-lawyer additionally fabricated his background in cryptocurrency trading, deceiving potential investors about the legitimacy of the investment scheme.
In 2023, the California Supreme Court stripped him of his legal license due to non-response to allegations involving the misuse of $25,000 belonging to a client. Previously, his license had been temporarily revoked on two different instances: once in 1997 and another time in 2012, for separate infractions.
During his probation period, Kagel will reside at a retirement home in Las Vegas, which also provides him with hospice services. If he needs to leave the property, he’ll be obliged to wear a tracking device to maintain compliance with his sentencing conditions.
As an analyst, I find myself reporting that my alleged associates, David Saffron and Vincent Mazzota, have entered not guilty pleas and are currently preparing for their trial set to commence in a federal court of Los Angeles, slated for the month of April 2025.
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2024-10-12 21:06