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McAfee antivirus founder arrested on tax evasion charges

| Oct 12, 2020 | Criminal/Civil Tax Litigation |

“Taxation is illegal,” John McAfee tweeted last year. It was part of a series of tweets about not filing income tax returns, which he claimed he was not required to do. He said he hadn’t filed any tax returns in eight years. He said his “net income is negative.” He claimed to be a “prime target for the IRS.”

He was.

The U.S. Department of Justice claims that McAfee has made millions over the past decade or so. But they did find that he hadn’t filed his tax returns between 2014 and 2018. The department alleges that McAfee has made money “promoting crypto-currencies, consulting work, speaking engagements and selling the rights to his life story for a documentary.”

They arrested him in Spain, where he awaits extradition to the U.S.

In addition to filing no tax returns, he allegedly had his income paid into cryptocurrency exchange accounts and other accounts in other people’s names. In addition, the DOJ says he concealed assets, such as real estate, a yacht and another vehicle by titling them in other people’s names.

According to NPR, he could be facing 30 years in prison and $1.75 million in fines if he is convicted. That’s on top of payment of his back taxes.

This isn’t the first illegal activity alleged against McAfee

McAfee allegedly went to Belize in an attempt to lower his tax bill. As many people who live abroad can tell you, the U.S. government can still collect taxes from many U.S. citizens who live abroad.

McAfee fled to Guatemala when he was deemed a person of interest (not a suspect) in the death of a neighbor. When his location in Guatemala was revealed, Guatemala arrested him for illegal entry and deported him back to the U.S. And, a U.S. District Court issued a $25 million judgment against him in a wrongful death case involving that neighbor in Belize. In March 2019, he tweeted that he would not pay.

He also stated that he hasn’t even responded to 37 lawsuits that were brought against him over the course of 11 years, claiming they were all frivolous.

He added that he had “no assets” and would be unable to pay.

The Justice Department and the Securities and Exchange Commission, however, believe that McAfee does have assets. Indeed, the SEC accuses him of making recommendations about initial cryptocurrency offerings without disclosing that he was being paid for them. The agency says he made over $23 million in this fashion in 2017 and 2018.

The government doesn’t care if you have issues with the concept of taxation, and it will take action.