A Beverly Hills man is facing six counts of cryptocurrency crimes, resulting in investors losing over $22 million worth of cryptocurrency. Gabriel Hay, 23, along with his accomplice Gavin Mayo, also 23, allegedly defrauded investors through a scheme involving digital assets. The duo faces charges including conspiracy to commit wire fraud, wire fraud, and stalking. They reportedly deceived investors through a series of “rug pulls,” where they created digital assets and abandoned the projects, leaving investors at a loss.
US Attorney Martin Estrada stated that scammers are quick to exploit new investment trends, such as cryptocurrencies, to deceive unsuspecting consumers. Principal deputy attorney general Nicole M. Argentieri highlighted that criminals take advantage of new technologies to steal investors’ money. Hay and Mayo allegedly defrauded investors of tens of millions of dollars through digital asset projects and threatened individuals who tried to expose their schemes. They face up to 20 years in jail on conspiracy and wire fraud counts, and a maximum of five years on the stalking count.
Court documents reveal that Hay and Mayo made false claims and provided misleading information about their digital asset projects, including stating false plans they never intended to fulfill. They collected millions of dollars from investors by abandoning projects such as Vault of Gems, Sinful Souls, and others they presented. The duo also harassed a project manager who exposed their fraudulent activities. Homeland Security Investigations Special Agent in Charge Michael McCarthy emphasized that using NFTs to commit fraud erodes trust in the digital ecosystem.
Cryptocurrency scams and cybercrimes have been on the rise globally, with countries like Russia, Australia, and Nigeria being top victims. The average cost of a cyber breach was estimated at $4.35 million in 2022, with the global economy predicted to incur about $10.5 trillion in cybercrime costs. Criminals increasingly target cryptocurrencies and digital assets for executing cybercrimes, leading to the US government sanctioning exchanges for laundering cryptocurrencies obtained through illegal activities. The prevalence of such criminal activities underscores the importance of consumers being cautious and vigilant in the digital asset space.
