Two California men, Gabriel Hay and Gavin Mayo, have been charged with defrauding investors of over $22 million in cryptocurrency through a series of digital asset project “rug pulls.” This type of fraud scheme involves soliciting funds from investors for a project and then abandoning it abruptly while retaining the investors’ funds. The charges were unsealed on Friday in Los Angeles, and both men were arrested the day before by Homeland Security Investigations (HSI) in Los Angeles.
According to court documents, Hay and Mayo, both 23 years old, sponsored several NFT and other digital asset projects and engaged in promotional activities to support those projects from May 2021 to May 2024. They allegedly made false and misleading statements about the projects being launched, including providing false project “roadmaps” detailing plans that they had no intention of fulfilling. For instance, they falsely claimed that the Vault of Gems NFT project would be the “first NFT project to be pegged to a hard asset.” However, after collecting millions from investors, they abandoned the projects without following through on their promises.
The fraudulent tactics used by Hay and Mayo extended to various digital asset projects, such as Vault of Gems, Faceless, Sinful Souls, Clout Coin, Dirty Dogs, Uncovered, MoonPortal, Squiggles, and Roost Coin. They also attempted to conceal their involvement in the schemes by falsely identifying other individuals as owners of the projects. When a project manager exposed Hay and Mayo as the masterminds behind the Faceless NFT project, they allegedly embarked on a harassment campaign against him and his family, causing emotional distress.
Hay and Mayo have been charged with conspiracy to commit wire fraud, wire fraud, and stalking. If convicted, they face a maximum penalty of 20 years in prison on each conspiracy and wire fraud count, as well as a maximum penalty of five years on the stalking count.
Victims of these fraudulent schemes have been encouraged to come forward and report their experiences. HSI Executive Associate Director Katrina W. Berger emphasized that such technological fraud schemes, although non-violent, have significant financial impacts on investors and are not victimless crimes. The National Cryptocurrency Enforcement Team (NCET) is leading the prosecution of this case to combat the growing illicit use of cryptocurrencies and digital assets.
Individuals who believe they have been victims of scams involving Hay and Mayo are urged to contact HSI to provide information and assist in the investigation. The case serves as a reminder of the risks associated with investing in digital assets and the importance of due diligence to avoid falling victim to fraudulent schemes in the burgeoning cryptocurrency market.