Federal prosecutors have charged two California men in the largest nonfungible token (NFT) fraud scheme prosecuted to date, alleging they defrauded investors of more than $22 million through a series of digital asset “rug pulls.” The six-count indictment, unsealed on Friday, accuses Gabriel Hay, 23, of Beverly Hills, and Gavin Mayo, 23, of Thousand Oaks, of orchestrating fraudulent NFT and cryptocurrency projects and abandoning them after collecting millions from investors.
From May 2021 to May 2024, Hay and Mayo allegedly promoted numerous NFT and digital asset projects, including Vault of Gems, Faceless, and MoonPortal, through false and misleading statements, according to court documents. Prosecutors say the pair provided fraudulent project “roadmaps,” detailing ambitious plans they never intended to fulfill. One example cited in the indictment involved the Vault of Gems project, where Hay and Mayo marketed the NFTs as being “pegged to a hard asset,” a claim authorities say was fabricated.
“Gabriel Hay and Gavin Mayo allegedly defrauded investors in digital asset projects of tens of millions of dollars and threatened an individual who attempted to expose their roles in these fraudulent schemes,” said Principal Deputy Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division. She added, “Fraudsters take advantage of new technologies and financial products to steal investors’ hard-earned money. The department is committed to protecting investors and will continue to work with our law enforcement partners to root out fraud involving cryptocurrency and other digital assets and bring offenders to justice.”
The indictment also alleges that Hay and Mayo targeted a manager of the Faceless NFT project who exposed their involvement. Prosecutors claim the two launched a harassment campaign against the manager and his family, sending threatening messages designed to cause emotional distress.
“For three years, Hay and Mayo apparently lied to their investors in order to defraud them out of millions of dollars,” said HSI Executive Associate Director Katrina W. Berger. “Such technological fraud schemes cost investors millions of dollars every year. Just because such crimes aren’t violent does not mean they are victimless. HSI will continue to investigate, disrupt, and dismantle such cryptocurrency fraud networks.”
Hay and Mayo face one count of conspiracy to commit wire fraud, two counts of wire fraud, and one count of stalking. If convicted, they each face up to 20 years in prison for the conspiracy and wire fraud charges and up to five years for stalking.
“Whenever a new investment trend occurs, scammers are sure to follow,” said U.S. Attorney Martin Estrada for the Central District of California. “My office and our law enforcement partners will continue our efforts to protect consumers and punish wrongdoers involved in crypto fraud.”
Authorities say Hay and Mayo attempted to conceal their involvement in the projects by falsely identifying others as project owners. The indictment alleges they used similar tactics across various projects, including Clout Coin, Dirty Dogs, and Roost Coin, among others.
The case is being investigated by Homeland Security Investigations (HSI) Baltimore and prosecuted by Trial Attorneys Tian Huang and Tamara Livshiz of the Justice Department’s National Cryptocurrency Enforcement Team (NCET), along with Assistant U.S. Attorney Maxwell Coll for the Central District of California. The NCET was established to address the growing illicit use of digital assets and to combat cryptocurrency-related crimes.
Authorities are urging anyone who believes they were defrauded by the schemes described to contact law enforcement at rugpullvictims@hsi.dhs.gov.
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