Two California men, Gabriel Hay and Gavin Mayo, have been charged by the U.S. Department of Justice (DOJ) for orchestrating a series of NFT rug pull scams that defrauded investors of over $22 million. This marks the largest NFT fraud case ever prosecuted by the DOJ.
How the Scheme Worked
Between May 2021 and May 2024, Hay and Mayo promoted numerous NFT projects on the Ethereum and Solana blockchains, including collections like Vault of Gems, Faceless, Sinful Souls, and MoonPortal. Using fake roadmaps and false claims—such as tying NFTs to real-world assets like jewelry—they lured investors, collected millions, and then abandoned the projects.
Rug pulls occur when developers promote crypto tokens or NFTs under false pretenses, only to disappear with investors’ funds. In addition to defrauding buyers, the duo allegedly harassed a whistleblower who exposed their activities.
Legal Consequences and Broader Impacts
Hay and Mayo face charges including conspiracy to commit wire fraud, wire fraud, and stalking. Each conspiracy and wire fraud count carries a maximum penalty of 20 years in prison, with stalking adding another five years.“Whenever a new investment trend occurs, scammers are sure to follow,” said U.S. Attorney Martin Estrada, vowing continued efforts to combat crypto fraud.
A Call to Action
The case, investigated by Homeland Security Investigations (HSI) and the DOJ’s National Cryptocurrency Enforcement Team, highlights the need for vigilance in the fast-evolving crypto space. As Katrina W. Berger of HSI stated, “Such technological fraud schemes cost investors millions every year.”
