John McAfee is charged with security fraud due to a “pump-and-dump” cryptocurrency scheme. Federal prosecutors have filed a lawsuit against McAfee and its executive adviser and bodyguard Jimmy Gale Watson Jr. undone and claims that the pair earned nearly $ 2 million by urging Twitter followers to invest in cryptocurrencies like Reddcoin and Dogecoin and then sell their own stake while the price rose.
“McAfee and Watson have exploited a social media platform and enthusiasm among investors in the emerging cryptocurrency market to make millions through lies and deception,” U.S. Attorney Audrey Strauss said in a statement. “The defendants allegedly used McAfee’s Twitter account to post messages to hundreds of thousands of his Twitter followers that provoked various cryptocurrencies with false and misleading statements to hide their true, self-interest motives.”
The couple allegedly managed their plan between December 2017 and October 2018. McAfee used his verified Twitter account, which currently has about 1 million followers, to launch a ‘Coin of the Day’ or ‘Coin of the Week’ order. According to the indictment, McAfee claimed he had no interest in these altcoins; in fact, McAfee would allegedly pre-purchase large quantities with bitcoin and then download it again after his followers increased the price.
McAfee and Watson are facing seven charges, each serving five to 20 years in prison. The criminal charges include wire fraud, conspiracy to commit commodities and security fraud, and conspiracy to commit money laundering.
McAfee – known for founding the antivirus company of the same name – was arrested last year on charges of tax evasion. The Securities and Exchange Commission sued him in October for fraudulently promoting initial currency offerings or ICOs. And in 2019, a court ordered him to pay $ 25 million because he allegedly ordered the murder of his neighbor in Belize in 2012. (McAfee denies involvement and refuses to pay the money.) These charges add another layer to his alleged crimes.