Federal prosecutors have indicted John McAfee, founding father of the antivirus software program firm McAfee Company (NASDAQ: MCFE) though he’s now not related to the corporate, with conspiracy to commit commodities and securities fraud, conspiracy to commit securities and touting fraud, wire fraud conspiracy and substantive wire fraud, and cash laundering conspiracy offenses associated to 2 schemes involving the fraudulent promotion of cryptocurrencies to traders. Jimmy Gale Watson Jr., who was recognized by prosecutors as an govt adviser of McAfee’s cryptocurrency crew, was additionally indicted on the identical prices. Watson was arrested final evening in Texas whereas McAfee, who resigned from the management of his eponymous firm in 1994, has been held in Spain since October 2020 on tax evasion prices. What Occurred: In response to prosecutors, McAfee and Watson, together with different related, perpetrated their fraud within the interval round December 2017 by way of October 2018. The primary scheme was a “scalping” or “pump and dump” endeavor that concerned the acquisition of publicly traded cryptocurrency altcoins at low market costs, with the plan to have McAfee endorse them on his widespread “Official McAfee” Twitter (NYSE: TWTR) account. McAfee then printed false endorsement tweets in regards to the altcoins with a purpose to artificially inflate their worth, with out mentioning his possession of the altcoins, which have been then bought when McAfree’s Twitter follows invested in them and drove up the worth. McAfee, Watson and their associates pocketed greater than $2 million whereas the long-term worth of the altcoins dropped after the Twitter promotions ended. In a second scheme, the Official McAfee Twitter account was used to focus on preliminary coin choices (ICOs) bought as securities by startup companies. McAfee didn’t alert his Twitter followers that he was being compensated with a proportion of funds raised from ICO traders. This occurred between December 2017 and February 2018, with McAfee, Watson and their associates incomes greater than $11 million in undisclosed compensation. What Occurs Subsequent: McAfee and Watson are each charged in a seven-count indictment that features the next: One depend of conspiracy to commit commodities and securities fraud, which carries a most potential sentence of 5 years in jail; One depend of conspiracy to commit securities and touting fraud, which carries a most potential sentence of 5 years in jail; Two counts of conspiracy to commit wire fraud and two counts of substantive wire fraud, every of which carries a most potential sentence of 20 years in jail; One depend of conspiracy to commit cash laundering, which carries a most potential sentence of 10 years in jail. Along with potential jail sentences, every of those prices additionally carries potential monetary penalties. “The defendants allegedly used McAfee’s Twitter account to publish messages to a whole lot of hundreds of his Twitter followers touting varied cryptocurrencies by way of false and deceptive statements to hide their true, self-interested motives,” stated Manhattan U.S. Legal professional Audrey Strauss. “McAfee, Watson, and different members of McAfee’s cryptocurrency crew allegedly raked in additional than $13 million from traders they victimized with their fraudulent schemes. Buyers must be cautious of social media endorsements of funding alternatives.” John McAfee talking on the 2016 Politicon occasion in Pasadena, California. Picture by Gage Skidmore/Flick. See extra from BenzingaClick right here for choices trades from BenzingaJohnson & Johnson’s COVID-19 Vaccine: Detroit Mayor Declines 6,200 Doses, Catholic Bishops Elevate ‘Ethical Issues’Why Paramount Transferring ‘A Quiet Place Half II’ To Memorial Day Weekend Is A Large Deal© 2021 Benzinga.com. Benzinga doesn’t present funding recommendation. All rights reserved.