Two California men, Gabriel Hay and Gavin Mayo, have been indicted for a $22 million cryptocurrency fraud scheme involving multiple rug pulls and harassment of investors.
Two California men, Gabriel Hay and Gavin Mayo, have been indicted for allegedly defrauding investors out of more than $22 million in a cryptocurrency scam. The indictment highlights a troubling trend in crypto-related fraud, with the FBI reporting significant losses in 2023.
Federal prosecutors have charged Gabriel Hay of Beverly Hills and Gavin Mayo of Thousand Oaks with conspiracy to commit wire fraud, two counts of wire fraud, and one count of stalking. Each fraud count carries a potential 20-year prison sentence, while the stalking charge could add an additional five years.
The indictment alleges that between May 2021 and May 2024, Hay and Mayo executed multiple fraudulent schemes, including the notorious "Vault of Gems NFT" project. They reportedly misled investors by claiming the project would be the first NFT pegged to a hard asset, promising collaboration with jewelers worldwide and the establishment of a dedicated exchange for jewelry retailers.
The term "rug pull" refers to a deceptive maneuver in the cryptocurrency world where creators abandon a project after collecting funds from investors. In this case, Hay and Mayo are accused of:
In addition to the fraud charges, the indictment reveals that Hay and Mayo allegedly stalked and harassed a project manager who exposed their fraudulent activities. The harassment included:
The case against Hay and Mayo is part of a larger trend in cryptocurrency crime. The FBI reported that while crypto-related crimes represent only 10% of financial fraud complaints, they account for nearly 50% of all financial losses suffered by Americans in 2023. Investment schemes similar to those allegedly perpetrated by Hay and Mayo caused losses totaling $4 billion nationwide.
Principal Deputy Assistant Attorney General Nicole Argentieri emphasized the department's commitment to protecting investors, stating, "Fraudsters take advantage of new technologies and financial products to steal investors’ hard-earned money. The department is committed to rooting out fraud involving cryptocurrency and other digital assets."
As the cryptocurrency landscape continues to evolve, the indictment of Gabriel Hay and Gavin Mayo serves as a stark reminder of the potential risks associated with digital investments. Investors are urged to exercise caution and conduct thorough research before engaging in cryptocurrency projects to avoid falling victim to similar scams.
