Two 23-Year-Olds Arrested in Los Angeles for Allegedly Defrauding Investors of $22M in NFT Rug Pulls

Gabriel Hay and Gavin Mayo had each been charged with a single count of conspiracy to commit wire fraud, two counts of wire fraud and one count of stalking.

Two 23-year-old California residents were arrested in Los Angeles on Friday and charged with fraud for allegedly scamming investors out of over $22 million in crypto assets through a series of non-fungible token (NFT) rug pulls.

According to a news release from the Office of Public Affairs of the United States Department of Justice, Gabriel Hay and Gavin Mayo were each charged with one count of conspiracy to commit wire fraud, two counts of wire fraud and one count of stalking.

Prosecutors allege that Hay and Mayo sponsored and promoted NFT and digital asset projects, performing promotional activities to drum up support for the projects. However, the Justice Department alleges that they made or caused others to make “materially false and misleading statements” about the digital asset projects.

Prosecutors also allege that Hay and Mayo provided misleading and false project roadmaps with plans for the NFT and digital asset projects that they did not intend to fulfill.

The indictment alleges that Hay and Mayo promoted the Vault of Gems NFT project by claiming that it would be the first NFT project “pegged to a hard asset.” However, prosecutors claim that the duo abandoned the project after collecting millions from investors.

When one project manager attempted to expose Hay and Mayo as being behind the Faceless NFT project, the two harassed that person, intimidating him and his family, according to Principal Deputy Attorney General Nicole Argentieri.

The Justice Department alleges that the two men used fraudulent tactics with various digital asset projects, which included Vault of Gems, Faceless, Sinful Souls, Clout Coin, Dirty Dogs, Uncovered, MoonPortal, Squiggles and Roost Coin.

Prosecutors said their department will work with law enforcement to uproot crypto and other digital asset fraud. “Fraudsters take advantage of new technologies and financial products to steal investors’ hard-earned money,” Argentieri said.