$22M NFT Fraud and Harassment Case Sends Two Californians to Court

Two California men, Gabriel Hay (aka “Mr. Handz” and “Vaultkeeper”) and Gavin Mayo (“Gavinm”), have been indicted in what authorities call the largest NFT fraud case ever prosecuted. The pair allegedly deceived investors out of over $22 million through fraudulent projects, including “Vault of Gems” and “Faceless,” promising massive returns based on fabricated claims and bogus roadmaps.

One scheme, Vault of Gems, was marketed as the first NFT project tied to hard assets, claiming users could exchange NFTs for physical jewels through a global network of jewelers. Despite collecting over $1 million, the defendants abandoned the project, funnelling the money into personal accounts. To obscure their involvement, Hay and Mayo used aliases and hired intermediaries.

The indictment also details a harassment campaign against a whistleblower who linked them to the Faceless project. This included threatening messages and fake emails from a law firm, causing significant emotional distress to the whistleblower and their family.

The charges—conspiracy to commit wire fraud, wire fraud, and stalking—could lead to sentences exceeding 60 years if convicted.

BitGalactic Commentary

This case highlights the darker side of NFT speculation, where greed and deceit exploit the trust of early adopters and investors. While innovative projects like CryptoPunks and Bored Ape Yacht Club continue to drive genuine interest in NFTs, fraudulent schemes like this tarnish the ecosystem. BitGalactic urges the community to exercise caution and conduct thorough due diligence when investing in any crypto or NFT-related project. The rise of such scams also emphasizes the need for regulatory oversight to protect users and maintain trust in this rapidly evolving space.