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Press Release

Disbarred Attorney Pleads Guilty to Promoting $9.5M Cryptocurrency Ponzi Scheme

For Immediate Release
Office of Public Affairs

A disbarred California attorney pleaded guilty yesterday to conspiring to operate a cryptocurrency Ponzi scheme that defrauded victims of more than $9.5 million.

According to court documents, David Kagel, 85, formerly of Beverly Hills, conspired to fraudulently induce victims to participate in a cryptocurrency Ponzi scheme. Kagel and his co-conspirators promoted investment programs that falsely guaranteed high-yield profits and promised to use artificial intelligence trading bots to trade victims’ investments in cryptocurrency markets. The Ponzi scheme promoter falsely told victims that Kagel, as the promoter’s attorney, held Bitcoin then equivalent to approximately $11 million in escrow that guaranteed victims’ investments against loss for any reason. To create a false sense of security and trust, Kagel provided letters to victims on his firm’s letterhead to fraudulently confirm the promoter’s false statements. Kagel admitted that he and his co-conspirators used victims’ funds for their own personal benefit. 

“David Kagel abused his position as an attorney to earn the trust of investors and to endorse false statements about a purported cryptocurrency investment that was, in fact, a scam. Kagel and his co-conspirators defrauded their victims out of millions of dollars and used the victims’ money to line their own pockets,” said Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division. “When lawyers lend a veneer of legitimacy to fraudulent schemes, it can lead to devastating losses for victims. The Criminal Division and its law enforcement partners will continue to aggressively pursue such fraudsters and hold them to account.”

“Kagel preyed on trusting individuals through a complex scheme to separate people from their hard-earned money,” said Special Agent in Charge Tyler Hatcher of the IRS Criminal Investigation (IRS-CI) Los Angeles Field Office. “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.”

Kagel pleaded guilty to one count of conspiracy to commit commodity fraud. He is scheduled to be sentenced on Sept. 10 and faces a maximum penalty of five years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

David Gilbert Saffron, 51, of Australia, and Vincent Anthony Mazzotta Jr., 52, of Los Angeles, were charged by a federal grand jury in a superseding indictment in December 2023 for their roles in the same cryptocurrency Ponzi scheme, and are awaiting trial that is scheduled to begin on Aug. 13. Saffron and Mazzotta allegedly promoted the investment programs under various names including Circle Society, Bitcoin Wealth Management, Omicron Trust, Mind Capital, and Cloud9Capital. Rather than investing victims’ funds in cryptocurrency, Saffron and Mazzotta allegedly misappropriated victims’ funds to pay for personal expenses including private chartered jet flights, luxury hotel accommodations, private mansion rentals, a personal chef, and private security guards.  

IRS-CI is investigating the case.

Trial Attorney Theodore Kneller of the Criminal Division’s Fraud Section is prosecuting the case.

If you believe you are a victim in this case, please contact the Fraud Section’s Victim Witness Unit toll-free at (888) 549-3945 or by email at To learn more about victims’ rights, please visit

Updated May 29, 2024

Financial Fraud
Securities, Commodities, & Investment Fraud
Press Release Number: 24-678