Alleged $22M crypto scam leads to arrests in Los Angeles
Two California men were arrested in Los Angeles in NFT schemes.
Two California men, Gabriel Hay and Gavin Mayo, both 23, were arrested in Los Angeles and charged with defrauding investors of over $22 million through a series of non-fungible token (NFT) schemes.
The Justice Department announced the charges, which include conspiracy to commit wire fraud, wire fraud, and stalking, according to Cointelegraph.
Prosecutors allege that Hay and Mayo promoted various NFT projects, including the Vault of Gems, under false pretenses, claiming innovative features such as being “pegged to a hard asset.” However, authorities say the duo abandoned these projects after raising millions from unsuspecting investors, leaving promised roadmaps and plans unfulfilled.
Fraudulent Tactics and Harassment Alleged
The indictment details a web of deceptive practices. Hay and Mayo allegedly provided misleading information about their projects and concealed their involvement by falsely identifying others as the project owners.
When one project manager exposed their role in the Faceless NFT project, the duo reportedly harassed and intimidated the whistleblower and their family.
According to Principal Deputy Attorney General Nicole Argentieri, the pair used threats and fraudulent tactics to deflect accountability while continuing to exploit new NFT and digital asset markets. “Fraudsters take advantage of emerging technologies to steal investors’ hard-earned money,” Argentieri said.
The accused promoters are linked to multiple failed projects, including Sinful Souls, Clout Coin, Dirty Dogs, and Squiggles. The Justice Department emphasized its commitment to combating fraud in crypto markets, pledging to hold perpetrators accountable.
If convicted, Hay and Mayo face significant prison time for their alleged roles in one of the largest NFT fraud cases to date.
Last week, despite a declining cryptocurrency market, NFT sales surged by 33%, surpassing $302 million. The unexpected rise highlights growing interest in digital assets even amid broader market challenges.
