California residents indicted in $22m crypto fraud case

Federal prosecutors have disclosed an indictment against California residents Gabriel Hay and Gavin Mayo, charging them with a $22 million crypto fraud scheme.

The accusations come as the FBI reports that Americans lost more than $5.6 billion to crypto fraud in 2023, a 45% increase from the previous year.

According to ABC NewsCiting prosecutors, Beverly Hills-based Hay and Thousand Oaks-based Mayo allegedly ran several “rugpull” schemes between May 2021 and May 2024. They also allegedly created NFT projects to attract investors before abandoning them altogether. while conserving the funds.

The U.S. Attorney’s Office charged both individuals with conspiracy to commit wire fraud, two counts of wire fraud, and one count of stalking. Each fraud count carries a potential prison sentence of 20 years, with the stalking charge adding an additional five years.

The two men, both aged 23, allegedly promoted several fraudulent projects, including the “Vault of Gems NFT,” collecting millions from investors before abandoning the projects.

The indictment details their attempts to hide their involvement by falsely attributing ownership of the project to others. Prosecutors also allege that the defendants launched a campaign of harassment targeting the manager and his family.

The case is part of a broader trend in cryptocurrency crime, with the FBI reporting that while crypto-related crimes make up only 10% of financial fraud complaints, they account for nearly half of all financial losses Americans suffered due to scams in 2023.

The investment projects, similar to those allegedly carried out by Hay and Mayo, caused the highest losses, $4 billion, nationally.