On Friday, federal prosecutors said that John McAfee, the founder of the popular McAfee antivirus software and his associate have planned and implemented fraudulent schemes by which they have amassed millions of dollars from investors of cryptocurrency.
McAfee and his partner Jimmy Watson have several charges against them including commodities and securities fraud conspiracy, wire fraud conspiracy and money laundering conspiracy. They also face wire fraud and touting fraud conspiracy.
Both the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have also filed charges against the pair.
Watson was arrested in Texas on Thursday and appeared before a judge on Friday. McAfee is being held in Spain, as he faces different criminal charges.
William F. Sweeney Jr., FBI Assistant Director announced the indictment in the Manhattan federal court, in a press release. The release said that McAfee and his Jimmy Watson, who is also his “cryptocurrency team” advisor allegedly, took part in an “age-old pump-and-dump scheme.”
They allegedly bought huge amounts of low-priced cryptocurrency altcoins. They artificially inflated the value of these coins with “false and misleading endorsement tweets.” When the coins reached high market values, they dumped these coins, earning a large profit.
John McAfee had been a towering figure in the U.S. In 1987, he founded and developed hugely popular antivirus software – McAfee which is named after him. In 1994 he resigned from McAfee Associates and in 2013 he created a parody video, filled with profanities as well as a way to uninstall the antivirus software.
This eccentric genius also stood for President twice but lost. He was forced to pay $25 as compensation for killing a neighbor in Belize. Now, he has been indicted in fraud.
In a release from the Justice Department, Manhattan U.S. Attorney General, Audrey Strauss said that John McAfee and Jimmy Watson had used the official Twitter account of McAfee to tout “various cryptocurrencies through false and misleading statements to conceal their true, self-interested motives.”
The press release also alleges that they were paid for their promotional tweets.
The Department of Justice alleges that McAfee team members earned more than $2 million in illicit profits from their altcoin scalping activities. They also allegedly earned more than $11 million in unreported compensation that they allegedly hid, according to the grand jury indictment.
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