Gabriel Hay of Beverly Hills and Gavin Mayo of Thousand Oaks, both 23-year-old men, are facing charges of alleged cryptocurrency fraud. According to the authorities, the duo have been indicted for defrauding investors of over $22 million in crypto.
A String of Broken Promises
The U.S. attorney’s office states that between May 2021 and May 2024, the Southern California men engaged in “rug pull” schemes. They collected investments for Non-Fungible tokens (NFTs) and digital asset projects. However, the two men were not interested in actualizing the promises made to the investors.
According to the prosecutor, in connivance with a yet-to-be-named co-conspirator, the duo collected $22.4 million from multiple rug pull schemes. These individuals, however, had no plans to see the projects through.
Vault of Gems, Hay, and Mayo claimed it would be pegged to hard assets in one of their NFT projects. The men told their investors that the project had been designed to work with jewelers worldwide. They deceived investors with claims that Vault of Gems was already making its exchange to serve jewelry retailers.
How Investors Discovered the Crypto Fraud
Some investors first got a hint of the rug pull in a post on the Vault of Gems’ X account.
To engage the community, the account had posted, “What’s happening?” in November 2021. The responses from members of the community alerted others to the fact that Hay and Mayo deleted parts of a community Discord channel. The channel served as a convergence platform for investors.
One of the users, Mal (@MalPachinko) response, alleged that Hay and Mayo failed to deliver on the roadmap. Mal noted that the duo left about 1,900 token owners holding the bag with no hopes of recovering their investments.
Analysts say the incident highlights why users in the crypto space need to familiarize themselves with different fraudulent schemes and how to avoid them.
California Authority Assures Justice
The authorities are accusing Hay and Mayo of transferring cryptocurrency realized from their projects into their wallets. This is part of the scheme to defraud their unsuspecting investors.
Aside from the Vault of Gems rug pull scheme, others they carried out included projects titled Sinful Souls, Clout Coin, Faceless, Uncovered, Dirty Dogs, and many more. Rug pull schemes come in various forms, including loss of value, as in the SnowdogDAO incident.
Principal Deputy Assistant Atty. Gen. Nicole Argentieri, head of the Justice Department’s Criminal Division, promised to protect investors. Argentieri also assured the department would do everything possible to eliminate crypto fraud and bring offenders to justice.
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