Skip to main content

John McAfee speaks at the Malta Blockchain Summit in St Julian's, Malta, on Nov. 1, 2018.DARRIN ZAMMIT LUPI/Reuters

John McAfee, the antivirus software pioneer whose former company still bears his name, has been indicted on fraud and money-laundering conspiracy charges stemming from two cryptocurrency schemes, the U.S. Department of Justice said on Friday.

Authorities accused Mr. McAfee and his bodyguard, Jimmy Gale Watson Jr., of exploiting Mr. McAfee’s large Twitter following to artificially inflate prices of “altcoins” through a pump-and-dump scheme, and concealing payments Mr. McAfee received from startup businesses to promote initial coin offerings.

Mr. McAfee and his accomplices allegedly reaped more than US$13-million from the schemes, according to the U.S. Department of Justice. The Commodity Futures Trading Commission filed related civil charges concerning the alleged pump-and-dump scheme.

Lawyers for Mr. McAfee and Mr. Watson could not immediately be identified.

Mr. McAfee is being detained in Spain following his arrest there on tax-evasion charges, which was announced in October, the Justice Department said. Mr. Watson was arrested on Thursday night, the department added.

Both also face civil charges by the U.S. Securities and Exchange Commission, which in October accused Mr. McAfee of concealing more than US$23.1-million he made from boosting seven cryptocurrency offerings on Twitter.

Mr. McAfee became the subject of a media frenzy in 2012 when he fled his home in Belize after police sought him for questioning about the death of a neighbour. They ultimately said he was not a suspect.

In the cryptocurrency cases, authorities said Mr. McAfee touted assets including Verge, Reddcoin and Dogecoin as part of a “Coin of the Day” or “Coin of the Week” tweet from around December, 2017, through February, 2018.

Authorities said Mr. McAfee held himself up as an expert on cybersecurity and cryptocurrency through his tweets, speeches and his role as a chief executive of a publicly traded cryptocurrency company.

They also accused him of telling followers he had no stake in the coins, even as he touted how they “will change the world.”

Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.

Report an error