Two California residents face serious federal charges for allegedly orchestrating multiple cryptocurrency scams that defrauded investors of $22 million. Gabriel Hay from Beverly Hills and Gavin Mayo from Thousand Oaks, both 23, are accused of running several fraudulent NFT projects between May 2021 and May 2024.
The pair allegedly created NFT ventures like "Vault of Gems NFT" to attract investors before abandoning the projects and keeping the funds - a practice known as a "rug pull" in crypto circles. Federal prosecutors claim they attempted to conceal their involvement by falsely attributing project ownership to other individuals.
The U.S. Attorney's Office has filed multiple charges against Hay and Mayo, including conspiracy to commit wire fraud, two counts of wire fraud, and one count of stalking. The fraud charges each carry potential 20-year prison sentences, while the stalking charge could add five more years.
The case highlights a growing trend in cryptocurrency crime. The FBI reports Americans lost over $5.6 billion to crypto fraud in 2023, marking a 45% increase from the previous year. While crypto-related crimes make up just 10% of financial fraud complaints, they account for nearly half of all financial losses to scams in 2023.
Investment schemes similar to those allegedly perpetrated by Hay and Mayo caused the highest losses nationwide, totaling $4 billion. The defendants are also accused of launching a harassment campaign targeting a project manager and their family.
This case represents one of the latest efforts by federal authorities to crack down on cryptocurrency-related fraud as losses continue mounting for American investors.