Disbarred Attorney Pleads Guilty To Pushing $9.5 Million Cryptocurrency Ponzi Scheme


Former California attorney David Kagel, 85, pleaded guilty on May 28, to charges related to his involvement in a cryptocurrency Ponzi scheme that defrauded victims of over $9.5 million.

The scheme, outlined in court documents, involved false promises of high-yield profits through cryptocurrency investments, leveraging Kagel’s position as a trusted attorney to deceive investors.

According to prosecutors, Kagel conspired with others to lure victims into the fraudulent scheme by guaranteeing substantial returns on investments and falsely claiming to use artificial intelligence trading bots for cryptocurrency trading.

To bolster the illusion of security, Kagel allegedly provided letters on his law firm’s letterhead, falsely confirming the validity of the investment program.

However, instead of safeguarding investors’ funds, Kagel and his co-conspirators misappropriated the money for personal gain.

Principal Deputy Assistant Attorney General Nicole M. Argentieri stressed on Kagel’s abuse of trust during a press briefing, noting that his legal credentials lent credibility to the fraudulent scheme, leading to devastating losses for victims.

Special Agent in Charge Tyler Hatcher of the IRS Criminal Investigation (IRS-CI) Los Angeles Field Office echoed these sentiments, underscoring IRS-CI’s commitment to pursuing individuals who exploit others for personal enrichment.

Kagel pleaded guilty to one count of conspiracy to commit commodity fraud and is set to be sentenced on September 10, facing a maximum penalty of five years in prison.

Meanwhile, David Gilbert Saffron and Vincent Anthony Mazzotta Jr., both implicated in the same Ponzi scheme, await trial following charges brought against them by a federal grand jury in December 2023.

Saffron and Mazzotta allegedly promoted various investment programs under different names, diverting investors’ funds for personal expenses, including extravagant travel and accommodations.

The trial for Saffron and Mazzotta is scheduled to commence on Aug 13..

The investigation into this cryptocurrency Ponzi scheme continues, with IRS-CI at the helm of the probe.