Cybersecurity multimillionaire John McAfee has been arrested in Spain and charged with tax evasion. He allegedly earned millions in income from promoting cryptocurrencies.
The indictment alleges that McAfee, 75, has evaded U.S. taxes by having his income “paid into bank accounts and cryptocurrency accounts in the names of others, while also using the names of others to conceal ownership of property and assets including a yacht,” CNN reported.
The Justice Department (DOJ) announced the charges after the Securities and Exchange Commission (SEC) announced it has filed civil charges against McAfee, alleging he made more than $23 million in undisclosed compensation by recommending seven cryptocurrency offerings on Twitter that the SEC claims were false or misleading.
“McAfee leveraged his fame to make more than $23.1 million in undisclosed compensation” by recommending at least seven initial coin offerings (ICOs) to his Twitter followers, the SEC said. He tried to sell “virtually worthless” cryptocurrency tokens by urging investors to buy the securities without disclosing his own holdings, the SEC alleged.
The DOJ also said McAfee did not file tax returns from 2014 to 2018. McAfee “faces five years in prison on each count of tax evasion and a maximum of one year for each count of willful failure to file a tax return,” CNN reported.
“The SEC is also pursuing charges against Jimmy Gale Watson Jr, a bodyguard to McAfee, on charges he aided and abetted the sale of the digital currencies, among other allegations,” the Daily Mail reported. “‘Potential investors in digital asset securities are entitled to know if promoters were compensated by the issuers of those securities,’ said Kristina Littman, the SEC’s 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,” The Mail said.
‘Long history’ with authorities
This was not McAfee’s first interaction with authorities. In 2019, McAfee has been ordered to pay $25 million in damages over the killing of his ex-neighbor Gregory Faull in 2012. Faull’s family claims McAfee paid a hitman $5,000 to kill him.
“John McAfee’s depraved acts of plotting, financing, and directing Greg’s murder reflect that he has absolutely no respect for life or law,” Faull’s family said in a statement, according to ItPro. “Although Greg cannot be replaced, today we are comforted that John McAfee’s evil acts have been officially condemned through the power of civil justice.”
Faull, who was one of McAfee’s neighbours in Ambergris Quay, was attacked “at least once” by McAfee’s dogs, according to the suit, and complained about them to both McAfee himself and the local Belizean authorities. Jeffrey Spiegel, one of Faull’s friends and neighbours, testified that when no action was taken to bring the dogs under control, Faull “took matters into his own hands” and poisoned the animals.
The lawsuit claims that upon discovering this, McAfee became “irate”, put the dogs down (with multiple gunshots) and began “parading up and down the beach, screaming”. It alleges that following this incident, McAfee arranged for the payment of $5,000 to “violent” local man Eddie McKoy to “subdue, torture, and murder” Faull. Faull was discovered in his home with taser burns on his torso and genitals, and a single gunshot wound to the back of the head.
McAfee was also detained in the Dominican Republic in July 2019 after he and five others were suspected of traveling on a yacht carrying high-caliber weapons, ammunition, and military-style gear, The Mail reported.