- Two men allegedly defrauded investors of $22M through multiple NFT rug pull schemes.
- Fraudulent NFT projects misled investors with false promises and fake roadmaps.
- Legal consequences include up to 25 years in prison for wire fraud and stalking charges.
A 23-year-old Beverly Hills man faces six criminal charges after allegedly defrauding investors of more than $22 million through various cryptocurrency and digital asset schemes. Gabriel Hay, alongside an accomplice, Gavin Mayo, was involved in creating fraudulent non-fungible token (NFT) projects and other digital assets, which they used to scam unsuspecting investors.
According to authorities, Hay and Mayo used a series of fraudulent projects, commonly referred to as “rug pulls,” to deceive investors. A “rug pull” occurs when creators promote an NFT or cryptocurrency project, attract investments, and then abandon the project, taking the funds with them.
The duo allegedly used this tactic with several NFT projects, including Vault of Gems, Sinful Souls, and Clout Coin. They also misled investors with false roadmaps and promises about their future success.
The investigation revealed that between May 2021 and May 2024, Hay and Mayo continuously misrepresented their digital asset projects, even going so far as to claim that Vault of Gems was the “first NFT project pegged to a hard asset.” However, after collecting millions of dollars from investors, they abandoned these projects, causing significant financial losses.
Additional Charges and Threats
In addition to the wire fraud charges, Hay and Mayo are also facing accusations of stalking after allegedly threatening individuals who tried to expose their fraudulent activities.
One project manager on the Faceless NFT project was reportedly harassed after discovering the duo’s involvement in the scam. The intimidation included threatening messages sent to the manager and his family.
Legal Consequences
The legal ramifications for Hay and Mayo are severe. Each defendant faces up to 20 years in prison for conspiracy and wire fraud charges. Additionally, they could each face up to five years for the stalking charge.
This case is just one example of a larger trend in which criminals exploit the decentralized nature of cryptocurrencies and NFTs to commit fraud. Law enforcement officials have warned that new technologies and financial products often attract fraudulent actors looking to take advantage of investors.
The U.S. Department of Justice has vowed to continue its efforts to crack down on these types of crimes and protect consumers from the risks associated with digital assets.
With crypto scams on the rise, authorities are stressing the importance of vigilance and regulation in the growing digital economy. As more individuals turn to crypto investments, the risk of encountering fraud remains a critical concern.
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