Alleged Rug Pull Schemes Targeted Investors; Defendants Face 20 Year Sentence
Two Southern California men have been charged with defrauding investors of more than $22 million through a series of cryptocurrency “rug pull” schemes, according to a six-count indictment unsealed Monday.
Gabriel Hay, 23, of Beverly Hills, and Gavin Mayo, 23, of Thousand Oaks, face charges of conspiracy to commit wire fraud, wire fraud, and stalking. The pair is accused of launching multiple digital asset projects, making false promises to investors, and abandoning the initiatives while retaining millions in funds.
Hay and Mayo were arraigned on Monday, December 23 at the United States District Court in Los Angeles.
The indictment alleges that between May 2021 and May 2024, Hay and Mayo promoted several NFT (nonfungible token) and digital asset projects, providing misleading statements and fake “roadmaps” outlining plans they had no intention of fulfilling.
In one example, Hay and Mayo marketed the Vault of Gems NFT project as the “first NFT project to be pegged to a hard asset.” However, after collecting millions from investors, they allegedly abandoned the project and others.
The accused also reportedly used tactics to hide their involvement, including falsely naming other individuals as project owners. Projects allegedly tied to the scheme include Faceless, Sinful Souls, Clout Coin, Dirty Dogs, MoonPortal, Squiggles, and Roost Coin.
The indictment further accuses the defendants of harassing a project manager who exposed their connection to the Faceless NFT project. Hay and Mayo allegedly sent threatening messages to the manager and his family, causing significant emotional distress.
“Whenever a new investment trend occurs, scammers are sure to follow,” said U.S. Attorney Martin Estrada. “We will continue efforts to protect consumers and punish wrongdoers involved in crypto fraud.”
Principal Deputy Attorney General Nicole M. Argentieri emphasized the Justice Department’s commitment to addressing cryptocurrency-related fraud. “Fraudsters take advantage of new technologies to steal investors’ hard-earned money,” Argentieri said.
HSI Executive Associate Director Katrina W. Berger added, “These crimes cost investors millions annually. Just because they aren’t violent doesn’t mean they’re victimless.”
If convicted, Hay and Mayo each face up to 20 years in prison for the conspiracy and wire fraud counts and an additional five years for the stalking charge.
The investigation was conducted by the Baltimore Field Office of Homeland Security Investigations (HSI). The case is being prosecuted by Assistant U.S. Attorney Maxwell K. Coll and Justice Department Trial Attorneys Tian Huang and Tamara Livshiz of the National Cryptocurrency Enforcement Team.
The NCET, established to combat illicit cryptocurrency use, focuses on crimes involving virtual currency exchanges, infrastructure providers, and other entities.
An indictment is an allegation, and all defendants are presumed innocent until proven guilty in court.
