Authorities said Friday that antivirus software pioneer John McAfee was indicted on fraud and money laundering conspiracy charges, alleging that he and his associates earned over $13 million by deceiving investors enamored with the new cryptocurrency sector.
In a newly unsealed indictment in Manhattan federal court, McAfee, 75, was charged alongside Jimmy Gale Watson Jr., who worked as an executive advisor on McAfee’s “so-called cryptocurrency squad,” according to prosecutors.
Watson, 40, was arrested Thursday night in Texas, according to prosecutors, and will appear in front of a federal magistrate judge in Dallas on Friday. McAfee is being held in Spain, according to officials, on separate criminal charges brought by the US Justice Department’s tax division.
Watson’s lawyer, Arnold Spencer, described his client as a decorated retired Navy Seal.
He said in an email that he “fought for other people’s rights and freedoms,” and that he “is entitled to and looks forward to his day in court to exercise some of those same rights.”
Spencer said, “Criminal indictments are blunt instruments, not precise scalpels.” “This isn’t the place to argue over whether cutting-edge technology such as cryptocurrencies are shares, commodities, or anything else.”
It was unclear who would represent McAfee at the time. In the federal court in Memphis, Tennessee, where tax charges were filed against him in October, there was still no lawyer identified for him.
“McAfee and Watson took advantage of a commonly used social media network and consumer interest in the nascent cryptocurrency industry to make millions through lies and deception,” said U.S. Attorney Audrey Strauss in a statement.
“The defendants allegedly used McAfee’s Twitter account to send messages to hundreds of thousands of his Twitter followers touting various cryptocurrencies while concealing their real, self-interested motives,” she continued.
McAfee was charged with tax evasion in Tennessee in October after failing to disclose income from supporting cryptocurrencies while advising, speaking, and selling the rights to his life story for a documentary.
McAfee created early internet protection tools and has previously been sought by authorities in the United States and Belize.
Despite earning “considerable revenue” from many sources, McAfee refused to file tax returns from 2014 to 2018, according to the Tennessee indictment.
McAfee was released from detention in the Dominican Republic in July 2019 after officials on the Caribbean island said he and five others were accused of traveling on a yacht carrying high-caliber firearms, ammunition, and military-style gear.