Reenat Sinay, 05 March 2021
Antivirus software innovator John McAfee and his bodyguard have been indicted on fraud and money laundering conspiracy charges for fraudulently touting various cryptocurrencies on Twitter to further two separate schemes, Manhattan federal prosecutors said Friday.
Between December 2017 and October 2018, McAfee and private security guard Jimmy Gale Watson Jr. tricked investors into buying over a dozen different digital currencies in a pair of scams that allegedly netted the two men a combined $13 million in profits, according to a seven-count indictment unsealed Friday. Watson was also “executive advisor” of McAfee’s so-called cryptocurrency team, prosecutors said.
In what’s known as a “pump-and-dump” or “scalping” scheme, McAfee and Watson loaded up on inexpensive virtual currencies including verge, tron and dogecoin before publicly endorsing them on McAfee’s Twitter account, the government said.
McAfee’s account, @officialmcafee, had over 784,000 followers in February 2018, according to prosecutors. It boasted 1 million followers as of Friday afternoon.
After artificially inflating the value of the coins, McAfee and Watson dumped their holdings at an increased price, raking in about $2 million, according to the indictment.
The two alleged co-conspirators also used McAfee’s Twitter account to promote initial coin offerings without telling investors they were being paid for those promotions, prosecutors said. The pair earned a collective $11 million paycheck for endorsing the ICOs, and took steps to conceal those payments from investors, the indictment says.