McAfee bodyguard pleads not guilty in $13M digital currency fraud case
The former bodyguard to embattled John McAfee has pleaded not guilty in a $13 million digital currency fraud case. Jimmy Gale Watson Jr. faces a seven-count indictment including conspiracy to commit securities fraud and substantive wire fraud.
McAfee hired Watson in 2017 to be his private bodyguard. The
decorated former Navy Seal rose up the ranks, becoming one of the executives
behind the McAfee Team, a digital currency team founded by the antivirus
software innovator that purported to give investors tips and advice on the best
projects to invest in.
However, as the team was using social media for pump and
dump schemes. The U.S. Justice Department unsealed an indictment against the
pair for two schemes in which they were accused of promoting junk projects and
ICO projects without disclosing they were receiving payments to do this. They
would also buy these tokens beforehand and once they shot up in price, they
would dump them and crash their markets, investigators said.
For their pump and dump scheme, they made at least $2
million, according to the Justice Department. Their biggest revenue stream was
through promoting junk ICO projects, earning them $11 million, authorities
said.
As Law360 now reports, Watson has pleaded not guilty to the
seven charges against him before U.S. Magistrate Judge Kevin Fox in a New York
Federal court.
The DoJ charged him, and McAfee, with one count of
conspiracy to commit commodities and securities fraud which carries a five-year
sentence; one count of conspiracy to commit securities and touting fraud which
carries a similar sentence; two counts of conspiracy to commit wire fraud and
two counts of substantive wire fraud, each of which carries a 20-year sentence;
and one count of conspiracy to commit money laundering which carries a maximum
potential sentence of ten years in prison.
In addition, the SEC and the CFTC have filed civil charges
against Watson and his former boss, who is currently in jail in Spain. McAfee
was arrested on separate charges—namely, tax evasion and making false statements.
Spanish authorities are working with their U.S. counterparts to extradite him
to face his charges.
FBI Assistant Director William Sweeney warned anyone
thinking of using digital currencies exempted them from following the law,
stating, “When engaging in illegal activity, simply finding new ways to carry
out old tricks won’t produce different results. Investment fraud and money
laundering schemes carry a strict penalty under federal law.”
Comments
Post a Comment