Two men from Southern California have been charged in a federal indictment for allegedly swindling investors out of over $22 million through a variety of NFT and digital asset scams, as reported by the U.S. Attorney's Office for the Central District of California. Gabriel Hay, 23, of Beverly Hills, and Gavin Mayo, 23, of Thousand Oaks, are accused of engaging in "rugpulls," a term used to describe the act where creators of digital asset projects abruptly abandon them after collecting funds from investors.
According to the indictment, Hay and Mayo allegedly utilized misleading statements and false project roadmaps to attract investments for their NFT projects, including Vault of Gems, Faceless, and others from May 2021 to May 2024. Yet, the partners never intended to follow through. Instead, they allegedly quickly dropped the projects as soon as they amassed millions in investments. "Whenever a new investment trend occurs, scammers are sure to follow," U.S. Attorney Martin Estrada emphasized in a statement, signaling a commitment to crack down on such fraudulent activities.
The U.S. Attorney's Office also detailed an alleged harassment campaign undertaken by Hay and Mayo against a project manager who attempted to reveal their involvement in the Faceless NFT project, wherein they reportedly sent threatening messages to him and his family, causing great emotional distress. Special Agent in Charge Michael McCarthy underscored the non-violent yet substantial harm of such crimes by stating, "These crimes may not involve violence, but they leave countless victims in their wake."
The defendants face serious charges, with a maximum penalty of 20 years for each of the conspiracy and wire fraud counts as well as up to five years for the stalking count if convicted. The Homeland Security Investigations Baltimore Field Office is leading the case, with Assistant United States Attorney Maxwell K. Coll and Justice Department Trial Attorneys Tian Huang and Tamara Livshiz of the National Cryptocurrency Enforcement Team prosecuting, thus demonstrating the government's increased scrutiny over cryptocurrency and digital asset-related crimes.
