You might remember the name “McAfee” from years past when it seemed like a majority of internet ads were trying to sell you the popular McAfee antivirus software.
John McAfee, the tech entrepreneur behind one of the most successful antivirus companies on the planet, will soon be known for something far less impressive after it was revealed this week that he’s being federally charged on money laundering and counts of fraud in connection with a cryptocurrency scheme he ran with a partner, according to Fox Business.
The 75-year-old was charged this week in the Southern District of New York with alleged crimes revolving around a cryptocurrency scheme that he and his partner, Jimmy Gale Watson Jr., used in order to print millions in profit within a relatively short amount of time — roughly $13 million in total.
McAfee had an impressive social media following on Twitter, to the tune of roughly one million followers, which he and his partner used to hype up various altcoins, which can be described as the penny stock equivalent in the cryptocurrency world.
Using his social media influence, McAfee would push a certain altcoin and generate hype, which in turn would temporarily inflate the price of the coin and allow McAfee and Watson to sell their holdings at a handsome profit. The practice is widely referred to as “pump-and-dump.”
One of the primary legal issues in that particular scheme is that McAfee and Watson never revealed their positions on the altcoins that they would generate hype for and, in return, cash out when they could allegedly print millions in profit after hyping them.
“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,” said Manhattan U.S. Attorney Audrey Strauss in a statement announcing the charges.
Another alleged scheme that McAfee and Watson would deploy involved teaming up with companies who were set to release what’s known as an initial coin offering (ICO), which in the stock world would be similar to an initial public offering (IPO).
The two would strike a back-end deal with the companies to promote the ICO using their social media influence without revealing to investors that a deal was in place and in return, prosecutors say McAfee and Watson would be paid a handsome piece of the profits from the resulting sales of the ICO.
Not only did the second scheme net them a vast majority of the millions in profits, but McAfee is also being charged with intentionally attempting to conceal the payments made by the companies involved. That, unsurprisingly, led to various money laundering charges being leveled against him.
Both men were also hit with civil charges by the U.S. Securities and Exchange Commission and the Commodities Futures Trading Commission.
Aside from potentially massive fines, the two also face prison sentences for the various charges — if convicted — that range anywhere from five to 20 years. McAfee is currently jailed in Spain for an unrelated incident.