McAfee Faces Decades Behind Bars After Fraud Indictment

Famed anti-virus pioneer John McAfee has been indicted on charges of cryptocurrency fraud, money laundering and more.

The 75-year-old, who is in Spain awaiting extradition to the US for tax evasion, is accused of conspiring with executive advisor Jimmy Watson and others on two fraud schemes running from December 2017-October 2018.

The first was a classic pump-and-dump in which the defendants allegedly bought large numbers of publicly traded altcoins, promoted them on Twitter without revealing their stake, and then sold them for a profit.

The Department of Justice (DoJ) claimed McAfee, Watson and the others made $2m from the scalping scheme.

In the second scheme, McAfee, Watson and others used McAfee’s official Twitter account to promote initial coin offerings (ICOs) without disclosing they were being paid by ICO issuers to do so.

This made them an estimated $11m which the defendants subsequently tried to conceal from investors. The duo are also alleged to have caused another member of the team to launder the money.

McAfee and Watson, 40, are charged in a seven-count indictment with one count of conspiracy to commit commodities and securities fraud, one count of conspiracy to commit securities and touting fraud, two counts of conspiracy to commit wire fraud and two counts of substantive wire fraud and one count of conspiracy to commit money laundering.

The charges could lead to maximum sentences of decades behind bars and financial penalties.

“As alleged, McAfee and Watson used social media to perpetrate an age-old pump-and-dump scheme that earned them nearly $2m. Additionally, they allegedly used the same social media platform to promote the sale of digital tokens on behalf of ICO issuers without disclosing to investors the compensation they were receiving to tout these securities on behalf of the ICO,” said FBI assistant director, William Sweeney.

“When engaging in illegal activity, simply finding new ways to carry out old tricks won’t produce different results. Investment fraud and money laundering schemes carry a strict penalty under federal law.”

McAfee was arrested in Spain last year. The SEC has also filed civil charges against McAfee and Watson relating to the case.