- The founder of McAfee Anti-virus, John David McAfee faces about 100 years in prison for cryptocurrencies frauds.
One of the most famous personalities in the crypto world, John David McAfee, together with his executive advisor are indicted several times in Manhattan federal court.
The official charge was posted on the judicial website for the Southern District of New York where Manhattan U.S. Attorney Audrey Strauss stated:
As alleged, 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.
The defendants allegedly used McAfee’s Twitter account to publish messages to hundreds of thousands of his Twitter followers touting various cryptocurrencies through false and misleading statements to conceal their true, self-interested motives.
In this style, McAfee, Watson and other team members raised more than $ 13 million from investors who eventually fell victim to fraudulent schemes.
The indictment also clarifies the two illegal schemes that the indicted persons practiced. The first, according to FBI Assistant Director, was William F. Sweeney Jr. historically known pump-and-dump scheme, which brought them almost two million dollars.
McAfee bought firstly a large number of altcoins with Watson and other team members, knowing that McAfee would later support them on his widely followed Twitter account. In order to increase the value of these altcoins, McAfee has always advised the public to invest when it has often provided false guarantees. McAfee then sold his position with his team for significant profits.
the long-term value of the recommended altcoins purchased by investors declined substantially as of a year after the promotional tweets.U.S. Attorney’s Office / Southern District of New York
The second scheme involved public promotion of ICOs to raise funds for start-up crypto companies. In this case, the accused persons concealed that the ICO issuers paid them for this promotion and compensated for it in the form of funds received from investors in the “initial coin offerings”.
As the United States Securities and Exchange Commission had publicly warned, and as MCAFEE and WATSON well knew, the federal securities laws required them to disclose any compensation paid by ICO issuers for touting securities offerings styled as ICOs
From approximately on or about December 20, 2017 through on or about February 10, 2018, MCAFEE, WATSON, and other McAfee Team members collectively earned more than $11 million in undisclosed compensation..U.S. Attorney’s Office / Southern District of New York
During this period, one of the team members was also engaged in banking transactions through which he laundered the proceeds of these fraudulent ICO schemes.
McAfee himself commented on the whole situation, sharing the day after the accusation on his twitter:
Defendants McAfee and Watson face about 100 years in prison at the maximum rate if guilt for these acts is found.
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