John McAfee, the founder of the popular McAfee antivirus software, arrested in Spain and charged with tax evasion and for fraudulently promoting initial coin offerings (ICO)
John McAfee, the eccentric millionaire and founder of the popular McAfee antivirus software, has been arrested in Spain and charged with tax evasion by federal prosecutors alleging that he hid cryptocurrency, a yacht, and real estate as part of a conspiracy to evade taxes.
In a press release, the Securities and Exchange Commission (SEC) charged businessman and computer programmer John McAfee for promoting investments in initial coin offerings (ICOs) to his Twitter followers without disclosing that he was paid to do so. McAfee’s bodyguard, Jimmy Watson, Jr., was also charged for his role in the alleged scheme.
SEC charges John McAfee with fraudulently touting ICOs https://t.co/2oUnozOZwS
— SEC_News (@SEC_News) October 5, 2020
According to the SEC’s complaint, McAfee promoted multiple ICOs on Twitter, allegedly pretending to be impartial and independent even though he was paid more than $23 million in digital assets for the promotions. When certain investors asked whether he was paid to promote the ICOs, McAfee allegedly denied receiving any compensation from the issuers.
The complaint alleges that McAfee made other false and misleading statements, such as claiming that he had personally invested in some of the ICOs and that he was advising certain issuers. The complaint alleges that Watson assisted McAfee by negotiating the promotion deals with the ICO issuers, helping McAfee cash out the digital asset payments for the promotions, and, for one of the ICOs McAfee was promoting, having his then-spouse tweet interest in the ICO. Watson was allegedly paid at least $316,000 for his role. According to the complaint, while McAfee and Watson profited, investors were left holding digital assets that are now essentially worthless.
McAfee and Watson also allegedly engaged in a separate scheme to profit from digital asset security by secretly accumulating a large position in McAfee’s accounts, touting that security on Twitter while intending to sell it, and then selling McAfee’s holdings as the price rose.
“Potential investors in digital asset securities are entitled to know if promoters were compensated by the issuers of those securities,” said Kristina Littman, Cyber Unit Chief. “McAfee, assisted by Watson, allegedly leveraged his fame to deceptively tout numerous digital asset securities to his followers without informing investors of his role as a paid promoter.”
Back in 2019, McAfee said that taxes are illegal and that he had not filed a tax return since 2010. He refers to himself as being a “prime target” of the U.S. Internal Revenue Service. In another Twitter post on January 3, 2019, McAfee wrote:
“I have not filed a tax return for 8 years. Why? 1: taxation is illegal. 2: I paid tens of millions already and received Jack Shit in services. 3. I’m done making money. I live off of cash from McAfee Inc. My net income is negative. But i am a prime target for the IRS. Here I am.”
I have not filed a tax return for 8 years. Why? 1: taxation is illegal. 2: I paid tens of millions already and received Jack Shit in services. 3. I'm done making money. I live off of cash from McAfee Inc. My net income is negative. But i am a prime target for the IRS. Here I am.
— John McAfee (@officialmcafee) January 3, 2019
McAfee said taxes are illegal and complained about government services. He noted that he lives off the money made from McAfee Inc. – the company he founded and resigned from in 1994 – and called himself a “prime target” for the IRS before writing “Here I am.”
Just a little over a year after John McAfee was arrested in the Dominican Republican (aboard a yacht carrying high-caliber weapons, ammunition, and military-style gear). Two months later, he was also arrested for wearing a thong mask.
In July 2017, McAfee wrote on Twitter that he predicted that the price of one bitcoin would jump to $500,000 within three years, and “If not, I will eat my own dick on national television.” In November 2017, he increased his prediction to $1 million. In January 2020, however, he stated on Twitter that his previous predictions were simply “A ruse to onboard new users”, and that bitcoin had limited potential because it was “an ancient technology”. Asked which cryptocurrencies he now recommended, he listed Monero and Pirate Chain.