Summary:
$22 million cryptocurrency scam involving two Beverly Hills men.
Charged with conspiracy, wire fraud, and stalking.
Executed a series of rugpulls in NFT projects.
Used false statements and misleading roadmaps to defraud investors.
Each faces a maximum of 20 years in prison for conspiracy and wire fraud.
Overview
A six-count indictment was unsealed on December 20, charging two men with a scheme that defrauded investors of over $22 million in cryptocurrency.
The Defendants
Gabriel Hay, 23, from Beverly Hills, and Gavin Mayo, 23, from Thousand Oaks, face serious charges including:
- Conspiracy to commit wire fraud
- Two counts of wire fraud
- One count of stalking
The Scheme
Authorities allege that Hay and Mayo executed a series of "rugpulls", a fraudulent tactic where creators of non-fungible tokens (NFTs) solicit funds and then abruptly abandon the projects.
U.S. Attorney Martin Estrada stated, “Whenever a new investment trend occurs, scammers are sure to follow.” This highlights the urgent need for consumer protection in the crypto space.
Fraudulent Activities
From May 2021 to May 2024, the defendants promoted various NFT and digital asset projects, making false statements and providing misleading roadmaps that they never intended to fulfill. 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.” Instead, they abandoned it after collecting millions.
Other projects involved included Faceless, Sinful Souls, Clout Coin, and more. When a project manager attempted to expose their fraudulent activities, Hay and Mayo allegedly initiated a harassment campaign against him and his family.
The Impact
Michael McCarthy, a Special Agent in Charge, emphasized that using NFTs for fraud not only exploits new technology but also erodes trust in the digital ecosystem. The alleged actions of Hay and Mayo have caused significant harm to many investors.
Possible Sentences
Each defendant faces a maximum of 20 years in prison for conspiracy and wire fraud counts, and up to five years for stalking.
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