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Software mogul, John McAfee charged with fraud over alleged cryptocurrency scheme

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Cybersecurity mogul and former presidential candidate John McAfee has been indicted on fraud and money laundering conspiracy charges stemming from two cryptocurrency schemes, the US Department of Justice said on Friday, 5 March.

Authorities accused McAfee and his bodyguard, Jimmy Gale Watson Jr, of exploiting McAfee’s large Twitter following to artificially inflate prices of ‘altcoins’ through a pump-and-dump scheme, and concealing payments McAfee received from startup businesses to promote initial coin offerings.

McAfee and his accomplices allegedly reaped more than $13m from the schemes, according to the US Department of Justice. The Commodity Futures Trading Commission filed related civil charges concerning the alleged pump-and-dump scheme.

McAfee is being detained in Spain following his arrest there on tax evasion charges which was announced in October, the justice department said. Watson was arrested on Thursday night.

Mr McAfee has previously expressed his disdain for taxes, tweeting in 2019 that he had not filed tax returns for years because ‘taxation is illegal’.

Both also face civil charges by the US Securities and Exchange Commission, which in October accused McAfee of concealing more than $23.1m he made from boosting seven cryptocurrency offerings on Twitter.

The entrepreneur, who was born in the UK, also launched unsuccessful bids to become the Libertarian Party’s candidate for the US presidential elections in 2016 and 2020.

According to BBC, McAfee became the subject of a media frenzy in 2012 when he fled his home in Belize after police sought him for questioning about the death of a neighbor. They ultimately said he was not a suspect.

In the cryptocurrency cases, authorities said McAfee touted assets including Verge, Reddcoin and Dogecoin as part of a ‘Coin of the Day’ or ‘Coin of the Week’  tweet from around December 2017 through February 2018.

Authorities said McAfee held himself up as an expert on cybersecurity and cryptocurrency through his tweets, speeches and his role as a CEO of a publicly traded cryptocurrency company.

They also accused him of telling followers he had no stake in the coins, even as he touted how they will change the world.

 

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