- Two Californian men have been charged with defrauding NFT investors $22 million
- The scammers stole the amount through rug pulls between May 2021 and May 2024
- The two provided investors with “misleading project roadmaps”
The United States Department of Justice has charged two Californian men with pocketing over $22 million through NFT rug pulls. The two, Gabriel Hay and Gavin Mayo, attracted investments via “misleading project roadmaps” and claims. According to the DOJ, Hay and Mayo, for example, told investors that one of the NFT projects would feature collectibles linked to a “hard asset,” a promise they didn’t keep as they abandoned the project after pocketing millions of dollars from investors.
The Scammers Harrased Whistle-blowers
NFT projects involved in the scheme include Vault of Gems, Sinful Souls, and Uncovered. To hide their tracks across these projects, Hay and Mayo used aliases like “Diamonhandz” and “Gavinm” respectively. They also falsely identified other individuals as the owners of the projects.
The scammers are also accused of harassing individuals who threatened to expose their fraudulent schemes. Hay and Mayo are charged with wire fraud and stalking and face up to 20 and five years in prison respectively.
According to Martin Estrada, the U.S Attorney for the Central District of California, scammers follow new investment trends, adding that his office will collaborate with law enforcement agencies to punish “wrongdoers involved in crypto fraud” as part of protecting consumers.
Technology Scams Aren’t Victimless
Homeland Security Investigations’ Katrina Berger noted that that although technology-linked schemes aren’t violent, it doesn’t “mean they are victimless.” Berger said Homeland Security is committed to investigating anf disrupting cryptocurrency fraudsters.
The charges come two weeks after HAWK token founders denied allegations of a rug pull. It also comes seven months after the creators of Evolved Apes NFT project were charged for pocketing over $2 million from investors and abandoning the project in an apparent rug pull.
With law enforcement agencies successfully investigating crypto and NFT-related cases, it’s to be seen whether this will help reduce fraud in the crypto and blockchain worlds.
