- DOJ charges two Californians in a $22M NFT fraud, marking the largest case to date.
- Fraudulent NFT projects misled investors with false claims, raising millions in crypto scams.
- The Justice Department highlights its focus on tackling NFT fraud and cryptocurrency crimes.
The Department of Justice has charged two California men with running the largest non-fungible token (NFT) fraud scheme prosecuted to date. Gabriel Hay and Gavin Mayo allegedly defrauded investors of over $22 million. This was through a series of fraudulent digital asset projects between 2021 and 2024.
The indictment details how the duo misled investors with false claims and abandoned their projects after getting substantial funds. Their actions highlight the risks of emerging investment trends. They also show the Justice Department’s commitment to fighting cryptocurrency-related fraud.
Projects and Misleading Claims
From May 2021 to May 2024, Hay and Mayo sponsored multiple NFT and cryptocurrency projects. They promoted them through deceptive marketing campaigns. They gave false roadmaps and exaggerated benefits to attract investors. For example, their Vault of Gems project falsely claimed to be the first NFT linked to a tangible asset. Even though it raised millions, they abandoned the project, leaving investors with nothing.
Furthermore, the indictment reveals a broader pattern of misconduct. The pair allegedly launched other fraudulent projects. These include Faceless, Sinful Souls, Clout Coin, and Dirty Dogs. They often concealed their involvement by falsely identifying others as project owners. This makes it harder to trace accountability.
Intimidation Tactics to Suppress Exposure
When a project manager for the Faceless NFT project revealed Hay and Mayo’s fraudulent activities, the duo allegedly retaliated. They started a harassment campaign targeting the whistleblower and his family. Their intimidation tactics included sending threatening messages to instill fear and emotional distress. Such actions show how far they went to protect their fraudulent operations.
Legal Consequences and Broader Implications
Hay and Mayo face serious charges, including conspiracy to commit wire fraud, wire fraud, and stalking. If convicted, each could face up to 20 years in prison for conspiracy and wire fraud, and five years for stalking.
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This case highlights the Justice Department’s efforts to address crimes involving cryptocurrencies and digital assets. The National Cryptocurrency Enforcement Team (NCET) played a key role in investigating this case. Their focus includes cryptocurrency exchanges, mixing services, and infrastructure providers that allow illegal activities.
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