John McAfee Arrested In Spain And Charged With Tax Evasion And Promoting Initial Coin Offerings

A little over a year after former tech guru (and one-time presidential candidate) John McAfee was arrested in the Dominican Republican (aboard a yacht carrying high-caliber weapons, ammunition and military-style gear), and two months after a "fake arrest" for wearing a thong mask...

... on Monday the eccentric millionaire was arrested - this time for real - in Spain, where he is awaiting extradition to the US after he was charged with tax evasion by federal prosecutors who allege McAfee hid cryptocurrency, a yacht, and real estate as part of a conspiracy to evade taxes, which he forgot to pay from 2014 to 2018.

At the same time the SEC also charged the former programmer 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.

McAfee's last tweet is from September 12, in which he explained why he is not voting for anyone: "Why would I choose one person over another to control me? Slave masters are the same. We are numbers rather than people, irrespective of the master."

Some more details as disclosed by the DOJ late on Monday:

An indictment was unsealed today charging John David McAfee with tax evasion and willful failure to file tax returns, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney D. Michael Dunavant for the Western District of Tennessee.

The June 15, 2020 indictment was unsealed following McAfee’s arrest in Spain where he is pending extradition.

According to the indictment, John McAfee earned millions in income from promoting cryptocurrencies, consulting work, speaking engagements, and selling the rights to his life story for a documentary. From 2014 to 2018, McAfee allegedly failed to file tax returns, despite receiving considerable income from these sources. The indictment does not allege that during these years McAfee received any income or had any connection with the anti-virus company bearing his name.

According to the indictment, McAfee allegedly evaded his tax liability by directing his income to be paid into bank accounts and cryptocurrency exchange accounts in the names of nominees. The 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.

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. McAfee also faces a period of supervised release, restitution, and monetary penalties.

Concurrently, the SEC also charged 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.

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 (of course, he was hardly alone in doing so, so we are confident the SEC will crackdown on all criminals equally regardless of their publicity status).

According to the SEC, when asked whether he was paid to promote the ICOs, McAfee denied receiving any compensation from the issuers. The complaint also 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 a 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."

This latest bizarre development probably means that McAfee's hopes to become the next US president have been put on hold for the time being.

The full DOJ indictment is below:

Mcafee Unsealed Indictment 0 by Zerohedge on Scribd