California residents indicted in $22m crypto fraud case

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

The charges come as the FBI reports Americans lost over $5.6 billion to crypto fraud in 2023 — a 45% increase from the previous year.

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

The U.S. Attorney’s Office has 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 20-year prison sentence, with the stalking charge adding a possible additional five years.

The pair, both 23 years-old, allegedly promoted several fraudulent projects, including the “Vault of Gems NFT,” collecting millions from investors before abandoning the ventures.

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

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

Investment schemes, similar to those allegedly carried out by Hay and Mayo, caused the highest losses at $4 billion nationwide.