Right now, the US Lawyer for the Southern District of New York, William F. Sweeney, introduced the unsealing of a seven count indictment charging John David McAfee, founding father of McAfee, and Jimmy Gale Watson, an government advisor to McAfee, with pump-and-dump schemes, in addition to preliminary coin providing (ICO) touting schemes.
Watson was arrested on March 4, 2021, in Texas. McAfee has been in Spanish custody since October 2020, after being arrested on U.S. tax evasion expenses (October 2020 indictment), and is awaiting extradition to the US. He’s additionally being sought by authorities in Belize for questioning concerning the homicide of his neighbor, Greg Faull, which occurred in November 2012.
With this indictment, McAfee continues his fall from grace; on the peak of Silicon Valley’s go-go period, the company which bears his identify as soon as sat firmly on the vanguard of cybersecurity.
McAfee has been energetic in cryptocurrency, as evidenced by the October 2020 indictment (United States District Courtroom for the Western District of Tennessee) for failure to pay his earnings tax on his earnings derived from his talking engagements (2014-16); rights to his life story for movie documentary (2015-16); advisor work (2016-18) and thru his promotion of cryptocurrencies (2017-18).
The latter portion of the 2020 indictment seems to be tangentially associated to the newest indictment.
McAfee March 2021 Indictment
Pump and Dump – McAfee and Watson are charged with buying giant portions of publicly traded cryptocurrency altcoins at “cheap market costs.” Then McAfee would, by way of his Twitter account “Official McAfee,” would promote the worth of those altcoins to traders to inflate the worth. It’s alleged they pocketed over $2 million for his or her efforts from December 2017 via January 2018.
The legal criticism incorporates the results of the FBI’s evaluation of Skype communications between McAfee and varied staff members. One of many focused shares is recognized as “Verge” (aka XVG).
McAfee’s Pump-and-Dump M.O. Defined
On December 13, 2017 McAfee transferred $15,000 to one in every of his staff members, and directed one-third of the quantity be used to buy XVG tokens at market value. Then, from Dec. 13 to 17, McAfee endorsed the XVG tokens on his Twitter account. Apparently, McAfee was known as out in a Tweet for pumping XVG, and he responded denying he owned any XVG.
I personal no XVG. I reside the way you shallow of us can not distinguish between somebody who shamelessly speaks his mind- as a result of it is true – and somebody with an ulterior motive. You already know completely nothing about me in case you imagine I’ve the time to waste spewing rubbish.
— John McAfee (@officialmcafee) December 15, 2017
McAfee additionally engaged in direct, one-on-one discussions, by way of textual content messages, with traders in regards to the XVG token alternative, denying any possession in all situations.
Then on the Dec. 17, after 4 days of pumping XVG, the staff member was instructed to dump XVG, and McAfee et al. garnered $30,000 revenue. The criticism notes that the worth for XVG tokens fell 85% within the ensuing 12 months.
McAfee proceeded to bait the hook together with his “Coin of the day” Tweets, during which he would determine cryptocurrency altcoins funding alternatives for his followers.
Starting tomorrow, I’ll every day discuss a singular altcoin. A lot of the 2,000 cash are trash or scams. I’ve learn each white paper. The few I am linked to I’ll let you know. The remainder I’ve no place in. These cash will change the world. You may help
— John McAfee (@officialmcafee) December 20, 2017
Altcoins recognized by the DoJ as a part of his pump-and-dump scheme embrace: Electroneum (ETN), Burstcoin (BURST), DigiByte (DGB), Reddcoin, (RDD), Humaniq (HMQ), Tron (TRX), Factom (FCT), Dogecoin (DOGE), Stellar Lumen (XLM), Syscoin (SYS) and Ripio Credit score Community (RCN) tokens.
Preliminary Coin Choices
McAfee and Watson are also charged with, once more, utilizing the ability of McAfee’s Twitter account to “tout the fundraising occasions” of the ICOs. What McAfee uncared for to say is that he was compensated by the ICO issuers, and that a big share of each ICO funding was skimmed off the highest, like wealthy cream, to compensate McAfee and others with out disclosing that compensation to the unwitting traders. For his or her efforts, the Division of Justice estimates that McAfee et al. pocketed roughly $11 million by touting seven ICOs from December 2017 via February 2018.
I don’t. I merely sift via the mass if tokens to seek out the gems and share them. It is in everybody’s curiosity to help cash that enhance our lives.
— John McAfee (@officialmcafee) December 20, 2017
When queried, McAfee denied receiving any compensation; as an alternative suggesting his acumen was accountable for his choice and that these cash would “enhance our lives,” – nicely, a minimum of McAfee’s.
McAfee and Watson face a few years in jail, if convicted. Present sentencing for the fees contains:
- 5 years – Conspiracy to commit commodities and safety fraud;
- 5 years – Conspiracy to commit securities and touting fraud;
- 20 years every – Two counts of conspiracy to commit wire fraud;
- 20 years every – Two counts of substantive wire fraud; and
- 10 years – Conspiracy to commit cash laundering.
Mockingly, essentially the most recent tweet from McAfee’s twitter account, on Feb. 27, is a request for a U.S. lawyer with expertise in extradition regulation and cryptocurrencies.