Two Southern California Men Charged in $22 Million Cryptocurrency Fraud Scheme

Two men from Southern California have been indicted for allegedly defrauding investors out of more than $22 million through a series of cryptocurrency scams involving non-fungible tokens (NFTs). Gabriel Hay, 23, of Beverly Hills, and Gavin Mayo, 23, of Thousand Oaks, are accused of orchestrating multiple "rug pull" schemes from May 2021 to May 2024, misleading investors with false promises and abandoning projects after collecting funds.

Key Takeaways

• Indictment Details: Gabriel Hay and Gavin Mayo face charges for conspiracy to commit wire fraud, wire fraud, and stalking.
• Total Amount Defrauded: Over $22 million collected from investors through fraudulent NFT projects.
• Nature of Fraud: The duo allegedly engaged in "rug pulls," where they solicited investments and then abandoned the projects.
• Threatening Behavior: They are also accused of stalking a project manager who attempted to expose their fraudulent activities.

Background of the Case

The U.S. Attorney's Office for the Central District of California announced the indictment, highlighting the growing concern over cryptocurrency fraud. The indictment alleges that Hay and Mayo misled investors about various NFT projects, including one called Vault of Gems, which they claimed would be the first NFT pegged to a hard asset, specifically jewelry.

The indictment outlines how the pair used deceptive marketing tactics to attract investments, only to abandon the projects shortly after raising significant funds. They reportedly raised approximately $22.4 million through several projects, including Faceless, Sinful Souls, Clout Coin, Dirty Dogs, Uncovered, MoonPortal, Squiggles, and Roost Coin.

The Allegations

The indictment details several key allegations against Hay and Mayo:

1. Misleading Claims: They falsely advertised their NFT projects, claiming partnerships with jewelers and the development of a dedicated exchange for jewelry retailers.
2. Rug Pull Schemes: After collecting funds, they abandoned the projects, leaving investors with no recourse to recover their investments.
3. Stalking and Harassment: Following the exposure of their fraudulent activities by a project manager, they allegedly harassed him and his family with threatening messages, posing as lawyers and investors.

Legal Consequences

If convicted, both men face severe penalties:

• Conspiracy to Commit Wire Fraud: Up to 20 years in prison.
• Wire Fraud: Each count carries a maximum of 20 years.
• Stalking: A maximum of five years.

The case is being prosecuted by the U.S. Attorney's Office, with a focus on protecting investors and holding fraudsters accountable in the rapidly evolving digital asset landscape.

Conclusion

The indictment of Gabriel Hay and Gavin Mayo serves as a stark reminder of the risks associated with investing in cryptocurrency and NFTs. As the digital asset market continues to grow, so does the potential for fraud, prompting law enforcement agencies to intensify their efforts to combat such schemes. Investors are urged to exercise caution and conduct thorough research before engaging in cryptocurrency investments.

Sources

• Southern California men indicted in alleged $22-million crypto fraud case - Los Angeles Times, Los Angeles Times.
• Crypto scam: Men from Beverly Hills, Thousand Oaks accused of bilking investors out of $22 million – Daily News, Los Angeles Daily News.
• Two Southern California men charged with NFT-based cryptocurrency fraud scheme Friday | News Channel 3-12, News Channel 3-12.
• Beverly Hills and Thousand Oaks Men Indicted for Alleged $22M NFT and, Hoodline.