Former Beverly Hills Lawyer Ordered to Pay $14M in Damages for Role in $9.5M Crypto Ponzi Scheme
Date: 2024-10-09 Author: Gabriel Deangelo Categories: IN WORLD
U.S. District Court Judge Gloria Navarro in Las Vegas sentenced Kagel to five years of probation, as well as fines. Prosecutors say 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.”
According to Reuters, victims invested in the scheme thinking it was using trading robots to invest in cryptocurrency. Investors were also misled by information about $11 million in escrow that purported to guarantee their investments.
In 2023, the California Supreme Court revoked Kagel’s law license after he failed to respond to disciplinary charges. Records show he embezzled $25,000 in client funds in the Ponzi scheme.
The victims’ money was used for his personal needs, including charter flights, luxury hotels, private mansions, a private chef, and security guards, the indictment says.
Kagel and his co-conspirators promoted investment programs with false guarantees of high returns. “Kagel preyed on gullible individuals through a complex scheme to rob them of their hard-earned money,” said Tyler Hatcher of the IRS Criminal Division, who is leading the case, in May. “IRS-CI is the best in the business at following the money to find the evidence needed to bring charges against those who seek to profit at the expense of their victims.”
David Gilbert Saffron of Australia and Vincent Anthony Mazzotta Jr. of Los Angeles are also under federal investigation. The co-conspirators have pleaded not guilty to Ponzi scheme charges and are awaiting trial in Los Angeles federal court.
According to a press release in May, the co-conspirators promoted investment programs under various names, including Circle Society, Bitcoin Wealth Management, Omicron Trust, Mind Capital, and Cloud9Capital.
