U.S. federal prosecutors have charged John McAfee, founder of cybersecurity firm McAfee, and his executive advisor Jimmy Gale Watson Jr for cryptocurrency fraud and money laundering.

In total, McAfee, Watson, and other members of the McAfee Team were able to collect over $13 million from two cryptocurrency pump-and-dump schemes, according to court documents.

Twitter account used for cryptocurrency fraud

Between December 2017 and January 2018, they netted more than $2 million in illicit profits via altcoin scalping, a fraudulent practice known as a ‘pump and dump’ scheme.

From December 2017 through 2018, they earned roughly $11 million by running a parallel scheme being paid to promote the initial coin offerings (ICOs) of multiple startups while concealing the payments they receive from ICO investors.

Between December 2017 and October 2018, McAfee, Watson, and another team member also laundered the digital asset proceeds stemming from the scalping and ICO touting schemes.

“The defendants allegedly used McAfee’s Twitter account to publish messages to hundreds of thousands of his Twitter followers touting various cryptocurrencies through false and misleading statements to conceal their true, self-interested motives,” Manhattan U.S. Attorney Audrey Strauss said.

“McAfee, Watson, and other members of McAfee’s cryptocurrency team allegedly raked in more than $13 million from investors they victimized with their fraudulent schemes.”

McAfee currently detained in Spain

They were charged in a seven-count indictment, with each count carrying maximum potential sentences of between five and 20 years in prison.

The U.S. Securities and Exchange Commission (SEC) has also filed civil charges against McAfee in a separate enforcement action.

He was indicted for being paid over $23 million in digital assets while pretending to be impartial and independent of the ICOs he was promoting.

“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,” said Kristina Littman, SEC Cyber Unit Chief, at the time.

McAfee was arrested and is currently being detained in Spain on separate tax evasion charges filed by the US Justice Department’s Tax Division last year.

Source: Bleeping Computer