By Nermeen Nabil Khear 
A US judge on Monday ordered an 85-year-old, recently disbarred California attorney to pay $14 million in restitution for his role in a $9.5 million cryptocurrency Ponzi scheme.
David Kagel, who practised law in Beverly Hills, pleaded guilty to one count of conspiracy toward the fraud in May.
U.S. District Judge Gloria Navarro in Las Vegas sentenced Kagel to five years of probation in addition to fines.
According to prosecutors, Kagel helped promote the crypto Ponzi scheme by drafting letters on his law firm’s letterhead. The letters were then sent to victims, creating a “false sense of security and trust.”
Per a Reuters report, victims poured money into the scheme, thinking that it used trading bots to invest in cryptos. Investors in the program were also misguided by Kagel’s $11 million in escrow, which guaranteed their investments.
In 2023, the California Supreme Court revoked Kagel’s license to practice law after he failed to respond to disciplinary charges. According to records, he misappropriated $25,000 in client money in the Ponzi scheme.
Further, the victim’s funds were used for his personal needs, including private chartered jet flights, luxury hotel accommodations, private mansion rentals, a personal chef, and private security guards, the charges read.
Kagel, Co-Conspirators Promote Ponzi Investment Programs
The crypto investment schemes promoted by Kagel and his co-conspirators falsely guaranteed high-yield profits.
“Kagel preyed on trusting individuals through a complex scheme to separate people from their hard-earned money,” Tyler Hatcher of the IRS Criminal Investigation, special in-charge of the case, said in May.
“IRS-CI is the best in the business at following the money to find the necessary evidence to bring charges against those who seek to prosper on the backs of their victims.”
David Gilbert Saffron of Australia and Vincent Anthony Mazzotta Jr. of Los Angeles are also held by a federal grand jury. These co-conspirators have pleaded not guilty to the Ponzi scheme and are awaiting trial in Los Angeles federal court.
According to a press release in May, the co-conspirators promoted the investment programs under various names including Circle Society, Bitcoin Wealth Management, Omicron Trust, Mind Capital, and Cloud9Capital.
The post Court Orders Ex-Beverly Hills Attorney to Pay $14M in Restitution to $9.5M Crypto Ponzi Links appeared first on Cryptonews.
This articles is written by : Nermeen Nabil Khear Abdelmalak
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