John McAfee Indicted For $13M Crypto “Pump And Dump” Scheme

  • General
  • March 5, 2021
  • 378
  • 6 minutes read

John McAfee

In October last year, John McAfee who’s a controversial entrepreneur best known for founding the cybersecurity powerhouse bearing his last name McAfee was indicted for tax evasion by US authorities with accusations of earning millions of dollars from cryptocurrency schemes and failing to report income and pay taxes as required to the US government.

Now, it appears that McAfee is facing even more charges from US authorities, with the District Court for the Southern District of New York (SDNY) having just announced further indictments of him for fraud and money laundering coming from alleged crypto “pump and dump” schemes.

  • McAfee along with an associate, Jimmy Watson, are accused of hyping and promoting certain cryptocurrencies on social media in order to artificially inflate their prices without disclosing that McAfee owned large quantities of the promoted crypto and intended to profit from his promotion.
  • McAfee, Watson, and other unnamed associates are alleged to have profited over $13 million by hyping certain cryptocurrencies with the help of McAfee’s large online following and then moving to sell them after short-term price increases generated by McAfee’s hype. This is what’s generally referred to as a “pump and dump” scheme.
  • McAfee, Watson, and the other unnamed associates are accused of using McAfee’s Twitter account to promote initial coin offerings (ICOs) without disclosing that they were being compensated for the promotions and then collectively earning over $11 million from those promotions. They’re also accused of earning over $2 million in profits from crypto “pump and dump” schemes.
  • Indicted for fraud for his alleged crypto ‘pump and dump’ schemes, McAfee was also indicted for money laundering for engaging in efforts to convert his alleged illicit proceeds into US dollars.
  • McAfee, 75, and his associate Watson, 40, are both facing seven-count indictments by the District Court for the Southern District of New York (SDNY). Watson was taken into custody in the state of Texas on Thursday night while McAfee is already in custody in Spain on separate criminal charges filed by the United States Department of Justice’s Tax Division and awaiting extradition judgment.

Now, McAfee definitely has a lot on his plate, facing separate criminal charges from the United States Department of Justice’s Tax Division and the District Court for the Southern District of New York in addition to separate civil charges brought against him by the US Securities and Exchange Commission (SEC) in October.

McAfee has been pinned down along with Watson who’s known to be his bodyguard, with both now facing mounting legal battles to fight. 

McAfee was detained in Spain in October and has spent over 5 months remanded in custody. He’s awaiting extradition to the US where he faces decades in prison and significant monetary penalties if convicted of the charges brought against him.

Photo credit: Gage Skidmore, licensed under CC BY-SA 2.0

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