There isn’t a day that goes by when I am not reminded of McAfee cybersecurity software. It is a standard of the industry going back to when John McAfee founded the company in 1987. He was once worth more than $100 million – and given inflation, in the days when he was worth that much, he was an exceptionally wealthy man. His net worth is now a paltry $4 million (and about to get far less).
This post has nothing to do with the current ownership of the company and, in fact, I feel somewhat sorry for them, as the name will ironically get connected to a fraudster.
John McAfee, Fraudster
John McAfee, former cybersecurity software development pioneer is not only about to be indicted on charges of cryptocurrency fraud and money laundering, he is on the run in Spain and he awaits extradition to the United States. When he returns, he will be charged with tax evasion.
You might say that McAfee reached the bottom of his work life in the 10-month time period from December 2017 to approximately October 2018. In that period, he and his “advisor” Jimmy Watson along with other “associates” decided to run a scam in the world of altcoins.
This is not an investment for the faint at heart, but it can be a huge mistake for the naïve-at-heart. Altcoins are an alternate form of currency in the generalized category of bitcoins except that they are supposed to be a “safer” investment. There are supposedly 20,000 various altcoin products. While bitcoins and altcoins can be a confusing and troubling investment instrument, you don’t have to know anything about them to understand what McAfee and his cohorts were doing.
Pump and Dump
There were two schemes in play. The first: former cybersecurity genius McAfee and his cohorts, bought a huge stake in altcoins that were publicly-traded. In fact, they slowly pumped millions of dollars into the altcoin investment instrument. This, of course, slowly raised the price.
At the same time, the investment group then took to social media and promoted the hell out of the investment to tens of thousands of followers. This was primarily done on Twitter. As people jumped on board and began to buy, the group then pulled the rug out from all of the clueless investors and sold their stake at a profit. The Department of Justice (DoJ) estimates McAfee and the others made more than $2 million in profits off of “the suckers.”
The second scheme: McAfee and his team of cohorts used McAfee’s Twitter account to promote initial altcoin offerings. McAfee and his team never made it publicly known that they were being paid by altcoin organizations to do so. In pumping the offerings in this manner, McAfee’s team made more than $11 million to do so.
According to the FBI:
“As alleged, McAfee and Watson used social media to perpetrate an age-old pump-and-dump scheme that earned them nearly $2 m. Additionally, they allegedly used the same social media platform to promote the sale of digital tokens…without disclosing to investors the compensation they were receiving to tout these securities…”
Goodbye from Jail
John McAfee is now 75 years of age. Given his choices to ultimately cheat thousands of investors, unless he plans on living to more than 110, he could ultimately expire behind bars. It is easy to feel sorry for this guru of cybersecurity until you realize that without oversite, he managed to cheat investors to the tune of at least $13 million.
Having thrown away his vast fortune on frivolity, he cashed in on his prior reputation and image to cheat many others some, undoubtedly, nearly out of their life savings. Worse, he found a collection of highly unethical losers to go along with his vision.
The two pump and dump schemes were borne out of a need for money and greed. McAfee was “down” to his last millions and instead of re-inventing himself in the high-tech world, he instead created a crime syndicate of losers.
How does this once great man rationalize what he did? I believe that in the world of unethical behavior men such as McAfee coat themselves in a Teflon cocoon. They are above others and above the rules of decency and responsibility.
The McAfee cybersecurity conglomerate may continue to thrive; however, their founder will slowly exit the stage of decency.
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