Men from California Are Charged With Creating the Biggest NFT Fraud Scheme
The U.S. Department of Justice (DOJ) has released an indictment accusing Gabriel Hay and Gavin Mayo, both of California, of cheating NFT investors out of more than $22 million. The case encompasses a number of alleged rug pull schemes across various NFT projects and is considered the largest NFT-related prosecution in DOJ history.
Arrests and Criminal Charges in Los Angeles
On Thursday, Hay, a resident of Beverly Hills, and Mayo, a resident of Thousand Oaks, were taken into custody in Los Angeles. They are charged with two counts of wire fraud, one offence of stalking, and one count of conspiracy to commit wire fraud. Katrina W. Berger, executive associate director of Homeland Security Investigations, said, “Hay and Mayo defrauded their investors out of millions of dollars by lying to them for three years.” “Investors lose millions every year as a result of such schemes.”
Claims of Inaccurate Information and Deceptive Roadmaps
The pair allegedly used names such “Mr. Handz,” “Diamondhandz,” “Centurion,” and “Vaultkeeper” for Hay and “Gavinm” for Mayo between May 2021 and May 2024. They are charged with using false statements and misleading roadmaps to promote NFT projects. Names like Vault of Gems, Faceless, Sinful Souls, and MoonPortal were among these projects, which were created on the Ethereum and Solana blockchains.
Comprehending Rug Pulls in the NFT Environment
When developers introduce tokens or NFTs under false pretences, promising future developments that never happen, this is known as a rug pull. The developers vanish after the tokens are sold, leaving investors with nothing. In this instance, Hay and Mayo allegedly made a promise that was never kept: the Vault of Gems NFT collection would be connected to tangible assets like jewellery.
Alleged Harassment and Investor Losses
Hay and Mayo allegedly took millions from gullible investors before shelving their ideas, according to the prosecution. Additionally, they were accused of harassing a Faceless NFT initiative project manager who had revealed their fraudulent operations.
Legal Repercussions and Official Declarations
The two may spend up to five years in jail for stalking and up to 20 years in prison for each conspiracy and wire fraud offence if found guilty. U.S. Attorney Martin Estrada stated, “Scammers are quick to follow whenever a new investment trend emerges.” “Our office is dedicated to safeguarding consumers and holding those responsible for cryptocurrency fraud accountable.”
Investigating Together to Stop Fraud Using Digital Assets
Homeland Security Investigations spearheaded the inquiry, with assistance from the National Cryptocurrency Enforcement Team at the DOJ. In order to protect consumers in the rapidly changing cryptocurrency market, the agencies seek to combat financial crimes, especially those using digital assets.
