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$22M NFT Fraud Scandal: Arrests Made Over Alleged Rug Pull Scheme
A massive NFT fraud scandal has unfolded, as two individuals, Gabriel Hay and Gavin Mayo, have been arrested in Los Angeles for allegedly orchestrating a fraudulent scheme that defrauded investors of over $22 million. The Department of Justice (DOJ) charged the 23-year-old duo with conspiracy to commit wire fraud, multiple counts of wire fraud, and stalking.
The scandal revolves around several NFT projects, including Vault of Gems, which claimed to be the first NFT project “pegged to a hard asset.” Authorities claim that Hay and Mayo promoted these ventures by spreading misleading information, providing false project roadmaps, and making exaggerated promises to attract investors. Once millions were raised, they allegedly abandoned the projects, leaving investors with substantial losses.
The DOJ alleges that the duo used harassment and intimidation tactics to silence individuals who exposed their involvement in the fraud. In one instance, when a project manager linked them to the Faceless NFT project, Hay and Mayo allegedly harassed the individual and their family. To further mislead others, they reportedly listed fake project owners and concealed their true identities across multiple projects, including Sinful Souls, Clout Coin, Dirty Dogs, MoonPortal, Squiggles, Uncovered, and Roost Coin.
Moreover, the indictment details aggressive tactics used to intimidate a whistleblower and his family. These tactics included sending threatening emails and messages posing as lawyers and investors, demanding that the whistleblower retract their claims. One email reportedly threatened to falsely accuse the whistleblower’s parents of inappropriate sexual conduct if they did not comply. An Instagram message sent in September 2023, almost two years after exposure, stated, “Don’t think we forgot about you… Get ready to get destroyed.” The DOJ claims these actions were intended to suppress further revelations and protect their fraudulent operations.
This massive fraud scheme highlights the importance of due diligence when investing in the crypto market. Investors must be cautious of projects with unrealistic promises and unverifiable claims.
Source: coinchapter.com
