Ex-Beverly Hills Lawyer Ordered to Pay $14M for Crypto Ponzi Scheme
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TLDR 85-year-old disbarred Beverly Hills attorney ordered to pay $14M for $9.5M crypto Ponzi scheme David Kagel pleaded guilty to conspiracy to commit fraud Kagel misled investors with fake security letters and false escrow claims Two co-conspirators await trial for related investment schemes Over 10,000 people lost $46.7M to crypto phishing scams in September 2023 A federal judge has ordered David Kagel, an 85-year-old disbarred attorney from Beverly Hills, to pay $14 million in restitution for his role in a $9.5 million cryptocurrency Ponzi scheme. The ruling, handed down by U.S. District Judge Gloria Navarro in Las Vegas, comes after Kagel pleaded guilty to one count of conspiracy to commit fraud in May. Kagel, who received a sentence of five years probation along with the hefty restitution order, played a key role in promoting the fraudulent investment scheme. As a practicing attorney at the time, he issued letters on his firm’s letterhead that gave victims a false sense of security and legitimacy. These letters led many people to invest their money under false pretenses. The scheme exploited investors’ trust by claiming to use trading bots for cryptocurrency investments. Kagel further misled victims by falsely claiming to hold $11 million in escrow, which he said guaranteed the safety of their investments. In reality, there was no such protection. Kagel’s involvement in the scheme had serious consequences for his legal career. In 2023, the California Supreme Court revoked his license after he failed to address disciplinary charges. Records show that he had misappropriated $25,000 in client funds to further the Ponzi scheme. Instead of investing the victims’ money as promised, Kagel used it for personal luxuries. Court filings reveal that he spent the funds on a private chef, security service, private jet, luxury hotel stays, and a private residence. This misuse of…
Filed under: News - @ October 10, 2024 10:19 am