American millionaire John McAfee gestures during an interview with AFP on his yacht anchored at Marina Hemingway in Havana, on June 26, 2019.
Mogul antivirus software John McAfee, who is awaiting extradition from Spain over allegations of tax evasion late last year, has just had legal issues aggravated by federal prosecutors in Manhattan on Friday morning. The 75-year-old computer programmer is now also charged with $ 13 million in fraud and money laundering.
Prosecutors say McAfee and Jimmy Gale Watson Jr., an executive advisor to his cryptocurrency team, engaged in a “pump-and-dump” scheme known as “scalping”, from where they bought large quantities of other publicly traded cryptocurrencies at cheap rates to be traded on social media.
“McAfee and Watson are believed to have exploited a widely used socialization platform and enthusiasm among emerging cryptocurrency investors to earn millions through lies and deception,” said the US Attorney in Manhattan. Audrey Strauss wrote in a statement. “The defendants allegedly used McAfee’s Twitter account to post messages to hundreds of thousands of his Twitter followers, supporting various cryptocurrencies through false and misleading statements to hide their true motives, interested in them. McAfee, Watson and other members of McAfee’s cryptocurrency team reportedly raised more than $ 13 million from investors they victimized with their fraudulent schemes. Investors should be cautious about supporting investment opportunities on social media. ”
McAfee now has more than a million followers on its Twitter-verified account, where it has promoted its coins in messages embedded in its criminal complaint.
McAfee posted those altcoin recommendations on Twitter on its verified account without revealing that it owns large amounts of them, even though it falsely promised transparency, prosecutors say.
Together with other members of his team, McAfee allegedly sold its investment position in that significant short-term price increase generated by tweets, but the long-term value of altcoin fell significantly in the following year. according to the complaint. .
Prosecutors say the first time McAfee successfully implemented this scheme happened in mid-December 2017, with an altcoin called Verge (XVG).
On December 21, 2017, a XVG investor insisted on McAfee if he bought altcoin before promoting it, and the antivirus guru falsely denied it, prosecutors say.
“I didn’t buy at all,” McAfee quoted the complaint as saying. “I wouldn’t be able to promote it if I owned it.”
Four days after McAfee allegedly promoted XVG in a tweet on December 13, 2017, the market price of the chips increased by over 500%, according to the complaint.
McAfee and an alleged unidentified co-conspirator scalped at least 11 other currencies between December 20, 2017 and January 28, 2018: Electroneum, Burstcoin, DigiByte, Reddcoin, Humaniq, Tron, Factom, Dogecoin, Stellar Lumen, Syscoin and Ripio Credit Tokens network, prosecutors say.
Watson, 40, was arrested Thursday night in Texas and will be presented to a federal judge on Friday.
Both McAfee and Watson face a seven-count indictment, one count of conspiracy to commit fraud in securities and securities, one count of conspiracy to commit securities and fraud, two counts of conspiracy. for committing bank fraud and two counts of fraudulent action, and a single charge of conspiracy to commit money laundering, which involves a possible combined exposure of decades in prison.
Read McAfee’s indictment and criminal complaint below:
(Photo by ADALBERTO ROQUE / AFP via Getty Images)
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