An 86-year-old former California lawyer, David Kagel, has been sentenced to five years probation and ordered to pay nearly $14 million after admitting to running a large-scale cryptocurrency Ponzi scheme. Kagel, who is currently in hospice care, will serve his probation at a senior care facility in Las Vegas. If his health improves, he will be required to wear a monitoring device.

From December 2017 to June 2022, Kagel and his accomplices defrauded investors by promoting a fake crypto bot trading program that promised high returns with no risk. The fraudulent operation lured in victims, amassing around $15 million in funds. Kagel used his legal status to draft letters on official law firm letterhead, giving the scam an air of legitimacy.

Victims were misled to believe their funds were being invested in a secure crypto trading scheme, with guaranteed returns of up to 100% within 30 days. In one instance, Kagel falsely claimed to hold 1,000 Bitcoin in escrow to secure the investments.

Kagel’s law license was revoked by the California Supreme Court in 2023 after he failed to respond to disciplinary charges related to misappropriation of client funds. His accomplices, David Saffron and Vincent Mazzotta, have pleaded not guilty and are awaiting trial.

This case is a stark reminder of the risks involved in crypto investments, especially those offering unrealistic returns.