def treeify(lst):
    tree = [copy.deepcopy(cat) for cat in lst if cat['CategoryLevel'] == '1']
    for el in tree:
        el["children"] = []
    for i in xrange(len(lst)):
        for j in xrange(len(tree)):
            if lst[i]["CategoryParentID"] == tree[j]["CategoryID"]:
                tree[j]["children"].append(copy.deepcopy(lst[i]))
    return tree


tree = treeify(http://pastebin.com/RL1jGGyR)