Crypto Fraud Scheme: California Residents Charged in $22 Million Scam

A recent indictment has been disclosed by federal prosecutors against two California residents, Gabriel Hay and Gavin Mayo, who have been charged in a $22 million crypto fraud scheme. This news comes as the FBI reports a significant increase in crypto-related losses, with Americans losing over $5.6 billion to crypto scams in 2023, representing a 45% increase from the previous year.

Alleged “Rugpull” Schemes and NFT Projects

According to prosecutors, Hay and Mayo, both 23 years old, allegedly executed multiple “rugpull” schemes between May 2021 and May 2024. They also allegedly created NFT projects to attract investors before abandoning them and keeping the funds. The pair 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. Additionally, prosecutors allege that the defendants started a harassment campaign targeting the manager and their family.

Charges and Potential Sentences

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.

A Broader Trend in Cryptocurrency Crime

The case is 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.

To avoid falling victim to such scams, investors should:

  • Conduct thorough research on investment projects and their teams.
  • Verify the legitimacy of NFT projects and their ownership.
  • Be cautious of projects that promise unusually high returns or guaranteed profits.
  • Report any suspicious activity to the relevant authorities.

Stay informed about the latest developments in the world of cryptocurrency and blockchain technology by following Global Crypto News.

Post Views: 0