An 85-year-old ex-attorney, David Kagel, has admitted to participating in a conspiracy to run a fraudulent cryptocurrency scheme, swindling victims out of more than $9.5 million.

Once a respected legal figure in Beverly Hills, California, Kagel now faces up to five years in prison for his involvement in the Ponzi scheme.

Kagel was accused of teaming up with others to entice victims into a bogus crypto investment plan promising high returns. Court papers reveal the scheme included false guarantees, such as claims that artificial intelligence bots were managing investments in the cryptocurrency market.

The scheme's promoter falsely assured victims that Kagel, acting as the promoter's lawyer, held Bitcoin worth about $11 million in escrow, supposedly protecting their investments from potential losses. Kagel also provided letters on his law firm's stationery to falsely verify the investment programs' legitimacy.

Principal Deputy Assistant Attorney General Nicole M. Argentieri highlighted that Kagel exploited his lawyer status to gain trust and endorse misleading claims about a cryptocurrency investment that turned out to be a scam. She stressed the serious impact when legal professionals lend credibility to fraudulent schemes, causing significant financial harm to victims.

"Kagel exploited trusting individuals through a complex scheme to take their money," said Special Agent in Charge Tyler Hatcher.

Kagel's guilty plea marks a significant step in the ongoing investigation. His sentencing is set for September 10, pending a federal judge's decision, with a maximum penalty of five years in prison.

Kagel has also confessed that he and his partners used victims' funds for personal gain. Meanwhile, the legal proceedings continue, with David Gilbert Saffron of Australia and Vincent Anthony Mazzotta Jr. of Los Angeles awaiting trial on August 13 for their alleged roles in the same crypto Ponzi scheme.

Accused of promoting investment programs under aliases like Circle Society, Bitcoin Wealth Management, Omicron Trust, Mind Capital, and Cloud9Capital, Saffron and Mazzotta allegedly diverted funds intended for cryptocurrency investments for personal expenses. These expenditures reportedly included private jet flights, luxury hotels, renting mansions, hiring personal chefs, and employing private security.

In conclusion, Kagel's admission exposes the deceptive practices behind the elaborate cryptocurrency fraud, underlining the ongoing repercussions for those involved in exploiting unsuspecting investors.