California residents indicted in $22m crypto fraud case

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

The charges come after the FBI reported that Americans lost more than $5.6 billion to crypto scams in 2023; This means a 45% increase compared to the previous year.

Beverly Hills-based Hay and Thousand Oaks-based Mayo allegedly ran multiple “rugpull” schemes between May 2021 and May 2024, ABC News reported, citing prosecutors. They also allegedly created NFT projects to attract investors and abandoned them, keeping the funds.

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

The duo, both 23, allegedly backed various fraudulent projects, including the “Vault of Gems NFT”, which raised millions from investors before abandoning the venture.

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

The case is part of a broader trend in cryptocurrency crimes; The FBI reports that crypto-related crimes account for only 10% of financial fraud complaints, but account for nearly half of all financial losses suffered by Americans due to fraud in 2023.

Investment schemes such as those allegedly run by Hay and Mayo caused the highest losses nationwide, at $4 billion.