Two 23-year-olds from California have been arrested in Los Angeles for allegedly defrauding investors of over $22 million through a series of fraudulent NFT projects.
Charges and Case Details
The United States Department of Justice announced that Gabriel Hay and Gavin Mayo face charges of conspiracy to commit wire fraud, wire fraud, and stalking. According to prosecutors, Hay and Mayo promoted various NFT and digital asset projects, providing misleading roadmaps and making 'materially false and misleading statements' about their intentions to fulfill project promises.
Fraudulent Projects
One such project, Vault of Gems, was marketed as the first NFT project 'pegged to a hard asset.' However, prosecutors claim the duo abandoned the initiative after collecting millions from investors. Furthermore, Hay and Mayo allegedly resorted to harassment and intimidation when a project manager revealed their involvement in another NFT project, Faceless. The Justice Department revealed that the duo used similar tactics across multiple projects, including Sinful Souls, Clout Coin, Dirty Dogs, MoonPortal, and Squiggles. To obscure their involvement, they reportedly misrepresented others as the project owners.
Officials Reaction
Principal Deputy Attorney General Nicole Argentieri emphasized the Justice Department's commitment to combating digital asset fraud. She stated: 'Fraudsters take advantage of new technologies and financial products to steal investors’ hard-earned money.' Officials vowed to work with law enforcement to eradicate crypto fraud schemes and protect investors.
Fraud in the digital asset sector remains a pressing issue, and efforts by the Department of Justice aim to protect investors by enhancing enforcement measures.
