The United States Department of Justice has unsealed an indictment which charges John McAfee with tax evasion and willful failure to file tax returns.
The indictment was unsealed early this week following McAfee’s arrest in Spain. He is due to be extradited back to the United States.
Failure to file tax returns
According to the statement from the Department of Justice, McAfee failed to file tax returns between 2014 and 2018 and US authorities believe that the IRS has been left high and dry.
The indictment alleges that McAfee earned millions of Dollars in income by promoting various cryptocurrencies, consulting for companies, fulfilling speaking engagements as well as selling the rights to his life story for a documentary.
It is worth noting that the indictment does not accuse McAfee of having received any income or having any connection with the McAfee security software company, which its namesake John McAfee had founded in 1987 before resigning seven years later. It is now owned by Intel.
Income paid to nominees bank accounts
The indictment further alleges that McAfee managed to evade his personal tax liability by having income from various sources paid into bank accounts and cryptocurrency exchanges that were in the names of various nominees.
If McAfee is convicted on the charges he faces, he could serve a maximum jail sentence of five years behind bars on each count of tax evasion. Furthermore he could face a maximum sentence of one year for each count of wilful failure to file a tax return. McAfee could also face supervised release, restitution as well as monetary penalties.
SEC has also filed criminal complaint
The United States Securities and Exchange Commission also has its sights set on McAfee, having filed an official criminal complaint in relation to seven different initial coin offerings (ICO).
The filing alleges that between November 2017 and February 2018, McAfee ‘leveraged his fame’ to make over $23mln in undisclosed compensation by promoting the seven ICOs through his personal Twitter account – which has 1 million followers.
The criminal complaint states that ICOs involved the offering and sale of various digital asset securities and that McAfee’s promotion of these various tokens and projects were ‘materially false and misleading’.
The filing also highlights that McAfee failed to disclose that he was being paid to promote these ICO’s which directly violates federal securities laws.
It’s alleged that the ICOs McAfee had touted on social media raised at least $41mln, of which McAfee made over $23mln for his promotions. McAfee had also lied to his followers and investors by denying that he had been paid to tout the projects.
The breakdown of McAfee’s compensation amounted to Bitcoin (BTC) and Ethereum (ETH) worth around $11.6mln while another $11.5mln was made up of the various ICO tokens he was promoting.