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John McAfee has been arrested and indicted for tax evasion, the U.S. Department of Justice announced. The cybersecurity entrepreneur has also been charged with fraudulently pumping cryptocurrencies by the U.S. Securities and Exchange Commission.<\/strong><\/p>\n The U.S. Department of Justice (DOJ) and the U.S. Securities and Exchange Commission (SEC) independently announced their actions against two-time U.S. presidential candidate John McAfee on Monday.<\/p>\n The SEC has charged the 74-year-old antivirus software tycoon and his bodyguard Jimmy Watson Jr. with fraudulently pumping initial coin offerings (ICOs). The agency explained that from at least November 2017 to February 2018, \u201cMcAfee leveraged his fame to make more than $23.1 million U.S. dollars (\u2018USD\u2019) in undisclosed compensation by recommending at least seven \u2018initial coin offerings\u2019 or ICOs to his Twitter followers.\u201d He had approximately 784,000 Twitter followers at the time; that number has significantly grown to about a million at press time.<\/p>\n According to the SEC, the antivirus software pioneer did not disclose that he was being paid to promote the tokens, which constitutes \u201cunlawful \u2018touting\u2019 and violates the federal securities laws.\u201d Emphasizing that \u201cThe ICOs at issue involved the offer and sale of digital asset securities and McAfee\u2019s recommendations were materially false and misleading for several reasons,\u201d the SEC detailed:<\/p>\n The ICOs McAfee touted raised at least approximately $41 million and McAfee made approximately $23.2 million in secret compensation for his touts.<\/p>\n<\/blockquote>\n The SEC also noted that McAfee \u201clied to investors by falsely denying he was being paid by the issuers\u201d when directly asked if he was being paid to promote the coins.<\/p>\n His paid promotions were exposed by a blogger in February 2018, rendering his tweets useless for pumping more ICOs. However, he still held \u201ca large number of virtually worthless securities from the ICOs he had previously touted,\u201d the SEC continued, adding that he then paid a third party to pump these tokens and encouraged investors to buy them without disclosing that he was trying to dump his own stash.<\/p>\n \u201cMcAfee engaged in a practice known as \u2018scalping,’\u201d which \u201cgenerally allows promoters to sell their securities holdings quickly and profitably through market interest that they deceptively generate, and violates the federal securities laws,\u201d the SEC described.<\/p>\n Watson was McAfee\u2019s bodyguard, who \u201csubstantially assisted McAfee\u2019s touting and scalping schemes,\u201d the SEC alleges, adding:<\/p>\n McAfee was paid bitcoin (BTC<\/a>) and ether (ETH<\/a>) worth more than $11.6 million, plus an additional $11.5 million worth of promoted tokens, as undisclosed compensation for his promotions of seven ICOs. McAfee paid Watson at least $316,000 for his role.<\/p>\n<\/blockquote>\n The SEC seeks to order the defendants \u201cto disgorge all ill-gotten gains\u201d and \u201cpay civil monetary penalties.\u201d The agency also seeks to permanently prohibit McAfee from serving as an officer or director of certain companies and the defendants from participating in the issuance, purchase, offer, or sale of any digital asset security.<\/p>\n McAfee has been aware of the SEC watching him for quite some time. In December 2018, he tweeted: \u201cFolks are warning me against opposing the SEC and point to Elon Musk\u2019s submission to them as an example I should follow. I have had many dances with the SEC. I know who they are, and I am not Elon Musk \u2013 I\u2019m John Fucking McAfee. Watch the difference.\u201d<\/p>\n<\/p>\n Meanwhile, the DOJ unsealed an indictment Monday charging McAfee \u201cwith tax evasion and willful failure to file tax returns.\u201d According to the announcement, \u201cThe June 15, 2020 indictment was unsealed following McAfee\u2019s arrest in Spain where he is pending extradition.\u201d On Sept. 28, the two-time presidential candidate tweeted that he \u201cWent to Spain this weekend to check the progress of the Mud Wrestling Arena I\u2019m building.\u201d<\/p>\n The DOJ explained that McAfee failed to file tax returns from 2014 to 2018 despite receiving \u201cmillions in income from promoting cryptocurrencies, consulting work, speaking engagements, and selling the rights to his life story for a documentary.\u201d<\/p>\n \u201cMcAfee allegedly evaded his tax liability by directing his income to be paid into bank accounts and cryptocurrency exchange accounts in the names of nominees,\u201d the announcement notes. \u201cThe indictment further alleges McAfee attempted to evade the IRS by concealing assets, including real property, a vehicle, and a yacht, in the names of others.\u201d Besides facing \u201ca period of supervised release, restitution, and monetary penalties,\u201d the DOJ explained:<\/p>\n If convicted, McAfee faces a maximum sentence of five years in prison on each count of tax evasion and a maximum sentence of one year in prison on each count of willful failure to file a tax return.<\/p>\n<\/blockquote>\n McAfee has made no secret that he is not paying taxes. \u201cTax evasion is [a] misrepresentation of income. I have never done that. I merely refuse to pay,\u201d he tweeted in February. Moreover, news.Bitcoin.com reported<\/a> in January 2019 that McAfee had fled the U.S. and was living in exile on a boat after he was charged with \u201cusing cryptocurrencies in criminal acts.\u201d<\/p>\n Do you think McAfee should get away with ICO pumping and tax evasion? Let us know in the comments section below.<\/strong><\/em><\/p>\n The post John McAfee Arrested, Indicted for $23 Million Illegal Crypto Pumping and Tax Evasion in US<\/a> appeared first on Bitcoin News<\/a>.<\/p>\nMcAfee Fraudulently Pumped Tokens<\/h2>\n
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McAfee Arrested and Indicted for Tax Evasion<\/h2>\n
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