Cryptocurrency Fraud: John McAfee Indicted For Money Laundering Scheme

The founder of the cybersecurity firm McAfee, John McAfee, had been charged by U.S. Federal prosecutors for money laundering and cryptocurrency fraud. His executive advisor named Jimmy Gale Watson Jr. had also been arrested on the same charges.

John McAfee, Watson, and the other cybersecurity firm members had been successful in collecting more than $13 million in total from two cryptocurrency fraud schemes, especially the pump and dump schemes of cryptocurrency, as the court documents state.

In the weeks between December 2017 and January 2018, the company had netted over $2 million as illegal profit through altcoin scalping via their Twitter handle. Altcoin scalping is a fraudulent practice and is alternatively known as a pump and dump scheme.

From December of 2017 till January of 2018, they had roughly earned $11 million by successfully running a parallel scheme being paid for promoting the initial coin offerings or ICOs of several startups. They had also concealed the payments that they had received from the ICO investors.

In the months between December 2017 and October 2018, the accused group containing McAfee, Watson and the others in the firm had also conducted money laundering of the digital assets that had proceeded stemming from the altcoin scalping and the ICO lauding schemes.

“The defendants allegedly used McAfee’s Twitter account to publish messages to hundreds of thousands of his Twitter followers touting various cryptocurrencies through false and misleading statements to conceal their true, self-interested motives,” Manhattan U.S. Attorney Audrey Strauss said.

“McAfee, Watson, and other members of McAfee’s cryptocurrency team allegedly raked in more than $13 million from investors they victimized with their fraudulent schemes.”

The accused had been charged in an indictment of seven counts, with each count having maximum potential sentencing of five to twenty years in prison. The U.S. Securities and Exchange Commission or SEC had also filed civil charges against John McAfee in a different enforcement action.

McAfee had been indicted for being paid more than $23 million in the digital assets as imposing to be impartial and liberal of the ICOs he had been promoting owing to cryptocurrency fraud

“McAfee, assisted by Watson, allegedly leveraged his fame to deceptively tout numerous digital asset securities to his followers without informing investors of his role as a paid promoter,” said Kristina Littman, SEC Cyber Unit Chief, at the time.

McAfee had been arrested, and now he is being detained in Spain on other tax evasion charges that had been filed by the U.S. Justice Department’s Tax division the previous year.

Source: IT News


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