John McAfee was accused of securities fraud due to a “pump and dump” cryptocurrency scheme. Federal prosecutors unveiled a case against McAfee and its executive adviser and bodyguard Jimmy Gale Watson Jr., claiming that the duo earned nearly $ 2 million by asking Twitter followers to invest in cryptocurrencies like Reddcoin and Dogecoin, and then selling their own assets when the price went up.
“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,” said US Attorney Audrey Strauss in a statement. “The defendants allegedly used McAfee’s Twitter account to post messages to hundreds of thousands of their Twitter followers, spreading various cryptocurrencies through false and misleading statements to hide their true self-interest motives.”
The pair allegedly ran their scheme between December 2017 and October 2018. McAfee used his verified Twitter account, which currently has around 1 million followers, to recommend a “Currency of the Day” or “Currency of the Week”. The prosecution says that McAfee claimed to have no stake in these altcoins; in reality, McAfee was supposed to buy large quantities in advance using bitcoin and then download them again after its followers raised the price.
McAfee and Watson are facing seven charges, each of which carries between five and 20 years in prison. Criminal charges include electronic fraud, conspiracy to commit commodities and securities fraud, and conspiracy to commit money laundering.
McAfee – known for founding the eponymous antivirus company – was arrested last year on other charges of tax evasion. The Securities and Exchange Commission sued him in October for fraudulently promoting initial offers of currencies or ICOs. And in 2019, a court ordered him to pay $ 25 million for allegedly ordering the murder of his neighbor in Belize in 2012. (McAfee denied involvement and refused to pay the funds.) These charges add another layer to his alleged crimes .