NEW YORK / WASHINGTON (Reuters) – John McAfee, the anti-virus software pioneer whose former company still bears his name, has been charged with fraud and money laundering conspiracy arising from two cryptocurrency schemes, has announced the US Department of Justice on Friday.
Authorities accused McAfee and his bodyguard Jimmy Gale Watson Jr. of exploiting McAfee’s big Twitter account to artificially inflate the prices of “altcoins” through a so-called pump and dump system , and cover up payments McAfee has received from start-ups to promote coin offerings.
The Justice Department said McAfee and his accomplices raised more than $ 13 million from the schemes. The charges were brought in federal court in Manhattan.
The Commodity Futures Trading Commission has filed related civil charges regarding the alleged pump and dump project.
Manhattan US Attorney Audrey Strauss said in a statement, “As alleged, McAfee and Watson have tapped into a widely used social media platform and investor enthusiasm in the emerging cryptocurrency market to earn millions through lies and deception.
McAfee’s lawyers could not be identified immediately. McAfee is being held in Spain after his arrest there on tax evasion charges announced in October, the Justice Department said.
Watson was arrested Thursday night in Texas, the department added.
Watson’s attorney, Arnold Spencer, said in a statement, “Jimmy Watson is a decorated veteran and former Navy Seal. He fought for the rights and freedoms of others, and he has the right and is looking forward to his day in court to exercise some of these rights.
Both also face civil charges from the United States Securities and Exchange Commission, which in October accused McAfee of concealing more than $ 23.1 million he made by raising seven bids. cryptocurrency on Twitter.
In the cryptocurrency business, authorities said McAfee touted assets such as Verge, Reddcoin and Dogecoin as part of a “Coin of the Day” or “Coin of the Week” tweet around December 2017. to February 2018.
Authorities said McAfee had presented himself as an expert in cybersecurity and cryptocurrency through his tweets, speeches, and his role as CEO of a publicly traded cryptocurrency company. They also accused him of telling his subscribers that he had no interest in the plays, even while he bragged about how they “would change the world.”
Reporting by Jonathan Stempel in New York and Chris Prentice in Washington; Edited by Matthew Lewis and Will Dunham