The U.S. Department of Justice (DOJ) is charging two California men for allegedly masterminding a multimillion-dollar non-fungible token (NFT) investment scam.
In a new press release, the DOJ says it’s charging 23-year-olds Gabriel Hay of Beverly Hills and Gavin Mayo of Thousand Oaks with conspiracy and wire fraud charges after they were accused of pulling multiple crypto rug pull scams involving NFTs.
[adinserter block="1"]Rug pull scams are when creators of a new asset intentionally inflate its price before selling their stashes, causing the asset to plummet in value and leaving investors holding the bag.
According to court documents, between May 2021 and May 2024, the duo promoted several altcoin and NFT projects and allegedly made or caused others to make false statements about the projects, such as when they would launch.
One example provided by the DOJ outlines how they allegedly promoted the Vault of Gems NFT project, which they falsely claimed was the “first NFT project to be pegged to a hard asset.”
However, they abandoned the project after getting millions of dollars of funds from investors. Other projects the duo was involved in include Faceless, Sinful Souls, Clout Coin, Dirty Dogs, Uncovered, MoonPortal, Squiggles, and Roost Coin.
To avoid detection, Hay and Mayo would allegedly lie about being behind the projects and instruct others to do the same, according to the press release.
As stated by Homeland Security Investigations (HSI) Executive Associate Director Katrina W. Berger,
“For three years, Hay and Mayo allegedly lied to their investors in order to defraud them out of millions of dollars. Such technological fraud schemes cost investors millions of dollars every year.
Just because such crimes aren’t violent does not mean they are victimless. HSI will continue to investigate, disrupt, and dismantle such cryptocurrency fraud networks.”
Hay and Mayo are also charged with stalking for allegedly embarking on a harassment campaign against a developer who exposed that they were behind one of the crypto projects.
If convicted of all counts, they face prison sentences of up to 25 years.
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