NFT Promoters Indicted On $22 Million Rug Pull Fraud Schemes

On December 20, 2024, two 23-year-old California residents, Gabriel Hay of Beverly Hills and Gavin Mayo of Thousand Oaks, were indicted for allegedly defrauding investors of over $22 million through multiple non-fungible token (NFT) "rug pull" schemes.

Between May 2021 and May 2024, Hay and Mayo promoted several NFT and digital asset projects, including Vault of Gems, Faceless, Sinful Souls, Clout Coin, Dirty Dogs, Uncovered, MoonPortal, Squiggles, and Roost Coin. They are accused of making false statements and providing misleading project roadmaps, ultimately abandoning these projects after collecting substantial funds from investors.

In one instance, they claimed that the Vault of Gems would be the "first NFT project to be pegged to a hard asset," a promise they did not fulfill. To conceal their involvement, they allegedly misrepresented other individuals as project owners. When a project manager exposed their roles, Hay and Mayo reportedly engaged in a harassment campaign against the individual and their family.

Both men are charged with one count of conspiracy to commit wire fraud, two counts of wire fraud, and one count of stalking. If convicted, they each face up to 20 years in prison for each wire fraud count and an additional five years for the stalking charge.

This case underscores the importance of due diligence when investing in digital assets. Investors are advised to thoroughly research projects and be cautious of schemes promising unrealistic returns.

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