Two California residents have been charged with NFT-related fraud resulting in damages amounting to $22 million, according to the US Department of Justice.
According to court documents, Gabriel Hay, known by the aliases Mr. Handz and Vaultkeeper, and Gavin Mayo, known as Gavinm, launched fraudulent projects Vault of Gems and Faceless. Investors were promised high returns, with fake roadmaps presented as evidence.
Vault of Gems was marketed as the “first NFT project linked to a physical asset.” The website falsely claimed that users could exchange tokens for physical jewels through a global network of jewelers. The fraudsters siphoned off over $1 million in investments to personal accounts.
In launching the Faceless project, the accomplices used fictitious names and hired third parties to conceal their involvement in the schemes. They threatened one user with lawsuits and harm to his parents for intending to expose the truth. US authorities have taken this incident into account in the ongoing proceedings.
Hay and Mayo face a maximum sentence of over 60 years on the combined charges.
In November, a dual citizen admitted to laundering over $73 million obtained from victims of investment fraud.