Software entrepreneur McAfee arrested on tax evasion charges

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John McAfee, the controversial software entrepreneur, has been arrested in Spain on US charges that he evaded taxes on millions of dollars he earned from activities such as touting cryptocurrencies.

The US Department of Justice announced the criminal charges on Monday and said the extradition of Mr McAfee from Spain was pending. The Securities and Exchange Commission filed parallel civil charges.

Mr McAfee, who founded the antivirus software company that bears his name, hid millions of dollars of income from US tax authorities — including from promoting cryptocurrencies and selling the rights to his life story, according to the justice department.

He used bank and cryptocurrency accounts in the names of others to hide income earned between 2014 and 2018, prosecutors alleged. Assets he bought, including a yacht, were similarly held in the names of nominees to evade paying taxes, according to the criminal indictment.

Mr McAfee was a highly successful software innovator a decade ago when he sold McAfee to Intel for $7.6bn. But he went on the run after the 2012 murder of his neighbour in Belize.

He fled to neighbouring Guatemala and was later deported to the US. Mr McAfee was ultimately never charged in connection with the Belize case.

In 2019, Mr McAfee said he had fled the US on his yacht because he was facing criminal tax charges. In an interview with Agence France-Presse in Cuba in July that year, he said: “I have not paid taxes for eight years. I will not pay taxes again — it is unconstitutional and illegal.”

The justice department said on Monday that he had failed to file five years of tax returns between 2014 and 2018. The indictment against Mr McAfee had been filed in June but had remained under seal until his arrest.

The civil charges filed by the SEC alleged that Mr McAfee had touted cryptocurrency sales called initial coin offerings to his Twitter followers without disclosing he was being paid for the endorsements. He earned more than $23m, the SEC said.

Mr McAfee’s bodyguard, Jimmy Watson, Jr, was also civilly charged in the same alleged scheme.

“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,” said Kristina Littman, chief of the SEC enforcement division’s cyber unit.

The SEC said Mr McAfee had no known attorney. Mr McAfee could not be immediately reached for comment.

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