Two 23-year-old men from Southern California, Gabriel Hay from Beverly Hills and Gavin Mayo from Thousand Oaks, have been indicted for allegedly defrauding investors of over $22 million through multiple non-fungible token (NFT) “rug pull” schemes.
The term “rug pull” refers to promoting a project to attract investments, only for the creators to abandon it and disappear with the funds.
Between May 2021 and May 2024, Hay and Mayo launched several NFT projects, taking money from investors without fulfilling their promises.
One notable project, Vault of Gems, involved 5,000 NFTs minted on the Ethereum blockchain. The project’s social media presence ended in November 2021, with many comments from users alleging they had been scammed.
The Vault of Gems project was only one of many. Other ventures linked to the pair include Faceless, Sinful Souls, Clout Coin, Dirty Dogs, Uncovered, MoonPortal, Squiggles, and Roost Coin. In total, these schemes allowed them to amass $22.4 million from unsuspecting investors.
Now, both Hay and Mayo face charges, including one count of conspiracy to commit wire fraud, two counts of wire fraud, and one count of stalking. If convicted, they could each face up to 20 years in prison for the conspiracy and wire fraud charges and an additional five years for stalking.
This case is part of a growing trend in NFT-related scams. Data from DappRadar shows that losses from crypto-related frauds, hacks, and scams increased by 5% in 2024, totaling $430 million.
Other recent NFT fraud cases highlight the widespread issue. In June, three UK nationals behind the “Evolved Apes” NFT collection were charged in the US with wire fraud and money laundering.
Similarly, in January, a US Air Force analyst, Devin Alan Rhoden, was accused of orchestrating a “rug pull” with the UndeadApes project, resulting in charges of money laundering and false statements.
