Two 23-year-old Southern California men have been indicted for allegedly defrauding investors out of more than $22 million in cryptocurrency, according to authorities.
Gabriel Hay of Beverly Hills and Gavin Mayo of Thousand Oaks are accused of collecting investments for nonfungible tokens, or NFTs, and digital asset projects with no intention of sticking around to see those efforts realized, prosecutors said.
The U.S. attorney’s office says that from May 2021 to May 2024, they and an unnamed co-conspirator collected $22.4 million from multiple “rug pull” schemes — in which a token or project creator collects investor funds, but then abandons the project while keeping the money.
The indictment alleges Hay and Mayo falsely claimed one NFT project, called Vault of Gems, would be the first “to be pegged to a hard asset,” telling investors that the project would work with jewelers around the world and had “already started making [its] own exchange” for jewelry retailers to use.
“What’s happening?” asked a November 2021 post by the Vault of Gems X account. Confusion and frustration followed in the replies, which included the allegation that Hay and Mayo had deleted parts of a community Discord channel where investors gathered.
“What’s happening is that you pulled and stole over a million dollars,” one person commented.
Cryptocurrency is a type of digital money run through a online network without a central authority backing it, like a bank or government institution. The largest cryptocurrency is Bitcoin, but others exist like Ethereum and Solana. Hay and Mayo are accused of transferring cryptocurrency from their projects into their own wallets as part of their schemes.
NFTs are unique items that can serve as proof of ownership in a digital world where things are easily copied.
Prosecutors allege Hay and Mayo repeated similar “rug pull” schemes several times, with projects titled Faceless, Sinful Souls, Clout Coin, Dirty Dogs, Uncovered, MoonPortal, Squiggles and Roost Coin.
“Fraudsters take advantage of new technologies and financial products to steal investors’ hard-earned money,” Principal Deputy Assistant Atty. Gen. Nicole Argentieri, head of the Justice Department’s Criminal Division, said in a statement. “The department is committed to protecting investors and will continue to work with our law enforcement partners to root out fraud involving cryptocurrency and other digital assets and bring offenders to justice.”
In a separate charge, prosecutors allege Mayo and Hay stalked and harassed one of their project managers after he publicly connected them to a fraudulent project.
When their unnamed project manager revealed them to be the true creators, the indictment says Mayo and Hay sent threatening emails, texts and social media messages to him and his parents, posing as lawyers threatening legal action and investors to force him to take down and recant his messages. One email threatened to falsely accuse his parents of lewd sexual behavior, according to the indictment.
An Instagram message sent to the project manager nearly two years later in September 2023 read: “Don’t think we forgot about you… Get ready to get destroyed,” the indictment states.
Mayo and Hay are charged with one count of conspiracy to commit wire fraud, two counts of wire fraud and one count of stalking. If convicted, they face up to 20 years in prison on each conspiracy and wire fraud count, and a maximum of five years for the stalking count.
