November 28, 2022

John McAfee

Paula Bustamante | AFP | Getty Images

Prosecutors on Friday accused the antivirus software company’s founder, John McAfee, and his staff of orchestrating fraudulent schemes to raise millions of dollars from cryptocurrency investors.

McAfee, 75, and his Cryptocurrency Team advisor Jimmy Watson, 40, allegedly got involved in an “ancient pump-and-dump program,” FBI Assistant Director William F. Sweeney Jr. said in one Press release announcing the charges in Manhattan Federal Court.

McAfee, who featured a larger-than-life online personality and ran for president twice, is currently being held in Spain where he faces separate tax evasion charges. McAfee resigned from the antivirus company founded in 1994, but created a mundane parody video in 2013 explaining how users can uninstall the software. In 2019, he was ordered to pay $ 25 million in damages for the 2012 murder of a former neighbor in Belize.

As part of the “scalping” program, McAfee and his team allegedly bought large quantities of cheap altcoins in cryptocurrency and then aggressively advertised them online with “false and misleading endorsement tweets” to artificially increase their market prices.

“The members of the McAfee team have collectively made more than $ 2 million in illicit profits from their altcoin scalping activities,” claims the Justice Department.

The couple also used McAfee’s popular Twitter account to “promote various cryptocurrencies through false and misleading statements to hide their true selfish motives,” Manhattan attorney Audrey Strauss said in a Justice Department press release.

The team would use social media to announce the fundraising drives of crypto startups while hiding the fact that they are being compensated for the advertising tweets, the press release said.

McAfee, Watson, and the rest of their team earned “more than $ 11 million in undisclosed payments they made to hide from investors,” the grand jury indictment said.

McAfee and Watson are charged with commodity and securities fraud conspiracy, wire fraud conspiracy, wire fraud, promoting fraud conspiracy and money laundering conspiracy.

Watson was arrested in Texas Thursday and will appear before a judge later Friday.

The press release indicated that the US Securities and Exchange Commission and the Commodity Futures Trading Commission have filed separate civil suits against McAfee and Watson.