John David McAfee, the eccentric antivirus software pioneer, has been indicted on fraud and money laundering charges by the Department of Justice, which alleges he and a business partner participated in a scheme that earned more than $13 million by falsely promoting cryptocurrency to unwitting investors.

McAfee, 75, and a member of his "cryptocurrency team," 40-year-old Jimmy Gale Watson, Jr., allegedly exploited Twitter and "enthusiasm among investors in the emergency cryptocurrency market to make millions through lies and deception," U.S. Attorney Audrey Strauss said in a statement on the indictment, which was unsealed Friday in Manhattan federal court.

FBI Assistant Director William F. Sweeney Jr. said the allegations boil down to "an age-old pump-and-dump scheme." The DOJ alleges McAfee, Watson and others would buy cryptocurrencies, hype them to McAfee's Twitter followers, which numbered about 784,000 at the time, to boost prices and then sell for a profit — in addition to promoting cryptocurrency offerings without disclosing they were allegedly receiving payment to do so.

The two men are charged with multiple counts of conspiracy to commit fraud, as well as a single count of conspiracy to commit money laundering. According to the indictment, if convicted of all charges, each could face up to 100 years in prison and financial penalties.

The DOJ said the Securities and Exchange Commission and the Commodities Futures Trading Commission have also filed civil charges against McAfee and Watson in parallel enforcement actions.

McAfee is currently detained in Spain on other criminal charges. It was not clear who is legally representing McAfee or Watson in this case. CNN Business sent an email to Janice McAfee, McAfee's wife, in an effort to reach him for comment.

It's not the first time McAfee — founder of the eponymous antivirus software firm, with which he is no longer affiliated — has had a run-in with the law.

The Friday indictment is just the latest episode in the bizarre saga of McAfee's life over the past decade. In 2012, McAfee briefly vanished after fleeing his home in Belize because local police tried to question him on the death of his neighbour. (He has denied involvement in the death and claimed he fled because he feared for his life).

He spent time in Guatemala, and then moved to Montreal, Canada, where he worked on a documentary about his life. He ran for President in 2016 as a Libertarian and launched a new security product that he called "a f---ing game changer."

In October 2020, McAfee was arrested in Spain after being indicted by U.S. prosecutors in a separate case related to alleged tax evasion. Currently, McAfee remains detained in Spain and his extradition to the United States is pending.

The indictment filed Friday details two schemes McAfee and Watson and other unnamed "McAfee Team members" allegedly carried out from December 2017 to October 2018 that prosecutors say defrauded cryptocurrency investors.

THE ALLEGED SCHEMES

The first is an alleged "pump-and-dump" scheme in which prosecutors claim the group bought up large numbers of publicly traded cryptocurrency "altcoins" at low prices before McAfee used his Twitter account to recommend that people buy those cryptocurrencies — without disclosing that he owned them. After the tweets helped inflate the cryptocurrencies' market value, the DOJ alleges McAfee and the team sold off their positions at the higher prices.

"Through this scalping scheme, McAfee and other McAfee team members ... collectively earned more than $2 million in illicit profits while the long-term value of the recommended altcoins purchased by investors declined substantially as of a year after the promotional tweets," court documents state.

In the second alleged scheme, McAfee and his team used his Twitter account to promote initial coin offerings, without disclosing that he was being compensated by the ICO issuers for his tweets. The Securities and Exchange Commission had previously warned that securities law required disclosing any compensation earned from publicly promoting initial coin offerings on behalf of the issuers.

McAfee and his team earned more than $11 million in "undisclosed compensation that they took steps to affirmatively hide from ICO investors," the complaint states.

"When engaging in illegal activity, simply finding new ways to carry out old tricks won't produce different results," the FBI's Sweeney said about the use of social media to carry out the alleged schemes.

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