A six-count indictment has been unsealed against two men from Southern California, accusing them of defrauding investors of over $22 million in cryptocurrency through fraudulent digital asset projects known as "rugpulls." Gabriel Hay, 23, from Beverly Hills, and Gavin Mayo, 23, from Thousand Oaks face charges including conspiracy to commit wire fraud, wire fraud itself, and stalking. They are scheduled for arraignment today at the United States District Court in Los Angeles.

"Whenever a new investment trend occurs, scammers are sure to follow," said United States Attorney Martin Estrada. He emphasized the commitment of his office and law enforcement partners to protect consumers from crypto fraud.

Principal Deputy Attorney General Nicole M. Argentieri highlighted that "Gabriel Hay and Gavin Mayo allegedly defrauded investors in digital asset projects of tens of millions of dollars and threatened an individual who attempted to expose their roles in these fraudulent schemes." She reaffirmed the Justice Department's dedication to protecting investors and prosecuting offenders involved in cryptocurrency fraud.

HSI Executive Associate Director Katrina W. Berger commented on the impact of such technological fraud schemes: "Such technological fraud schemes cost investors millions of dollars every year."

Court documents reveal that between May 2021 and May 2024, Hay and Mayo sponsored multiple NFT and digital asset projects. They engaged in promotional activities but allegedly made false statements about the projects' viability and intentions. The indictment accuses them of falsely promoting a project called Vault of Gems as being "the first NFT project to be pegged to a hard asset." After collecting funds from investors, they allegedly abandoned the projects.

The accused reportedly employed similar tactics with other projects like Faceless, Sinful Souls, Clout Coin, Dirty Dogs, Uncovered, MoonPortal, Squiggles, and Roost Coin. Efforts were allegedly made by Hay and Mayo to conceal their involvement by misidentifying others as project owners.

A harassment campaign was purportedly initiated against a manager who exposed their role in the Faceless NFT project. Messages were sent to intimidate him and his family.

Special Agent Michael McCarthy from Homeland Security Investigations (HSI) noted that "Using NFTs to commit fraud not only exploits emerging technology but also erodes trust in the broader digital ecosystem."

The defendants face potential penalties if convicted: up to 20 years for each count related to conspiracy and wire fraud, along with five years for stalking.

The HSI Baltimore Field Office is leading the investigation. Assistant United States Attorney Maxwell K. Coll is working alongside Justice Department Trial Attorneys Tian Huang and Tamara Livshiz on this case under the National Cryptocurrency Enforcement Team (NCET). This team was created to address illicit cryptocurrency use.