McAfee Creator Charged in Cryptocurrency Scam, Allegedly Raked in Over $13 Million From Investors

John McAfee and Jimmy Watson face charges of conspiracy, fraud, and money laundering in connection with schemes to trick cryptocurrency investors.

By Agence France-Presse | Updated: 6 March 2021 14:50 IST

McAfee Creator Charged in Cryptocurrency Scam, Allegedly Raked in Over $13 Million From Investors

McAfee and Watson used social media to perpetrate pump-and-dump scheme

Highlights

John McAfee was promoting cryptocurrencies on Twitter to drive up value
Perpetrators allegedly raked in more than $13 million from investors
McAfee is in custody in Spain pending a decision

The creator of McAfee computer security software was facing charges Friday that he cashed in on a "pump-and-dump" scheme, by promoting cryptocurrencies on Twitter to drive up their value.

John McAfee, founder of the antivirus firm that bears his name, and Jimmy Watson face charges of conspiracy, fraud, and money laundering in connection with schemes to trick cryptocurrency investors, according to an indictment unsealed by the US Department of Justice.

"McAfee and Watson exploited a widely used social media platform and enthusiasm among investors in the emerging cryptocurrency market to make millions through lies and deception," US attorney Audrey Strauss said in a release.

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McAfee, Watson, and other members of their "cryptocurrency team" allegedly "raked in more than $13 million (roughly Rs. 95.1 crores) from investors they victimized with their fraudulent schemes," according to Strauss.

Pump-and-dump schemes typically involve over-hyping the value of stocks or, in this case cryptocurrency, by holders so that they can be sold at artificially high prices.

"McAfee and Watson used social media to perpetrate an age-old pump-and-dump scheme," FBI assistant director William Sweeney said.

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"When engaging in illegal activity, simply finding new ways to carry out old tricks won't produce different results."

McAfee and Watson also used Twitter to promote digital tokens on behalf of initial coin offerings without disclosing they were being paid for their efforts by the startups, according to the indictment.

McAfee, 75, is in custody in Spain pending a decision on his extradition to the United States where he is wanted for tax evasion.

He has been held at a prison near Barcelona since he was arrested in the Spanish city in October just as he was about to board a flight to Istanbul.

The arrest followed his indictment in June in the United States for tax evasion and willful failure to file tax returns between 2014 and 2018, despite earning millions from consulting work, cryptocurrencies and selling the rights to his life story.

Since making a fortune with his eponymous antivirus software in the 1980s, McAfee has become a self-styled cryptocurrency guru.

He has one million followers on Twitter, where he describes himself as a "lover of women, adventure and mystery."

McAfee made headlines after he moved to Belize and his neighbor in the Central American country was mysteriously murdered in 2012, a crime that remains unsolved.

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