Two California men have been charged in a $22 million cryptocurrency scam. According to authorities, the suspects, 23-year-old Gabriel Hay of Beverly Hills and Gavin Mayo of Thousand Palms, are accused of defrauding unsuspecting investors in the cryptocurrency scheme.
In a statement from prosecutors, the two men are accused of taking money to invest in non-fungible tokens (NFTs) and disappearing. Prosecutors also said the duo launched several cryptocurrency schemes that met the same NFT endpoint.
According to a statement issued by the United States Attorney's Office, the two men, with the assistance of another person, carried out this fraud from May 2021 to May 2024. The statement said that they carried out an act known as rug pulling, where the developers or people responsible for the project take investors' money and abandon the project.
Two California Men Charged in Multiple Cryptocurrency Fraud Schemes
In the indictment, prosecutors alleged that the suspects, Hai and Mayo, lied to investors about the status of one of their projects, Vault of Games. The duo claimed that the NFT project would be the first to be tied to a fixed asset. They also lied to investors that Vault of Games would work with jewelers around the world, a claim that turned out to be false. Additionally, the men claimed to have started an exchange operation, where jewelers would come in and sign up to provide the service.
The Vault of Games handle posted on X in November 2021, asking what was going on. After a while, followers gathered around the project’s comments section, accusing them of deleting the investor page on their Discord channel. Most users were frustrated, criticizing the project with one thing; they were scammed by its founders. Comments later accused the developers of stealing community funds, with most feeling disappointed that they failed to deliver on their promise.
According to prosecutors, the California men acted brazenly and without remorse, transferring the stolen funds to their wallets. They also noted that Vault of Games was not the duo’s first rodeo, having linked them to projects like Faceless, Sinful Souls, Dirty Dogs, Uncovered, Roost Coin, Clout Coin, MoonPortal, and more.
In her statement, the Justice Department’s Principal Deputy Assistant Attorney General, Nicole Argentieri, condemned the act, pointing to the dangers of emerging technologies. “Fraudsters are exploiting new technologies and financial products to steal investors’ hard-earned money,” Argentieri said.
Argentieri also assured the public that the department will continue its crackdown on individuals and entities that carry out these acts. She added: “The department is committed to protecting investors and will continue to work with our law enforcement partners to crack down on fraud involving cryptocurrencies and other digital assets and bring criminals to justice.”
In addition to the charges against them, prosecutors alleged that Hay and Mayo stalked and harassed one of their project managers because he had advertised one of their projects as a scam. When the project manager, who was first blamed for the rug-pulling, identified the California men as the project’s creators, they sent him several threatening letters in hopes of getting him to recant his story, prosecutors said. They also posed as fake lawyers to get him to back down from talking to the cops.
In one email, Hay and Mayo threatened to falsely accuse the project manager’s parents of sexual misconduct. The final threat came in September 2023, the indictment says, with the pair reminding the project manager that they were still watching him and planning to “destroy” him. The men are charged in California with one count of conspiracy to commit wire fraud, one count of stalking and two counts of wire fraud. If prosecutors win a favorable verdict, they could spend up to 25 years in prison.
