After indicating last month that it intended to serve Johannes Steynberg under the Hague Convention, the CFTC has now requested authorization to carry out an alternative service.
If approved, the CFTC will serve Steynberg by publishing a notice on the Supreme Court of Texas website and in a Texas newspaper.
The CEO of Mirror Trading International is Johannes Steynberg (MTI).
It is suspected that Clynton and Cheri Marks were in charge of the defunct Ponzi scam MTI (right).
The Marks and Steynberg are both citizens of South Africa.
Steynberg eluded capture after MTI’s demise in late 2020 and escaped to Brazil.
Steynberg was detained by Brazilian authorities in December 2021 as a result of an international warrant.
Pending extradition Complexo Prisional de Aparecida de Goiânia, a jail in the Brazilian state of Goiás, is where Steynberg is said to have been detained.
Steynberg is anticipated to someday be returned to South Africa. The fact that Steynberg is facing criminal accusations in the US might throw a wrench in the plans.
Steynberg’s extradition procedures have up to this point been kept under wraps if any charges even exist.
According to the lawsuit the CFTC filed against Steynberg, MTI was a $1.7 billion Ponzi scam. It should be noted that while the CFTC’s regulatory complaint is a civil one, Steynberg’s extradition procedures are unaffected by it.
The CFTC must execute service for the prosecution of Steynberg to move forward. This has been difficult since the case was brought in July 2022.
Too far, the CFTC has sought to reach Steynberg via
No answer to email; no reaction from his Brazilian attorneys; “We ceased representing the Ponzi when it collapsed in 2020” from MTI’s South African lawyers; and “We don’t want to get involved until Public Prosecutors have through evaluating the matter” from the Brazilian SEC.
The CFTC has now disqualified the Hague Convention service after first evaluating it because
These procedures might take up to a year to finish, adding significantly to the delay and depriving the deceived participants of the redress requested here.
On September 1st, the CFTC filed a request for approval to publish a notice serving Steynberg in the Austin America-Statesman and on the website of the Supreme Court of Texas.
Although there is little to no possibility that Steynberg will get any of these papers, the court will consider service on Steynberg to have been properly completed if the request is approved and carried out.
A conclusion on the CFTC’s motion is still pending as of the time of publishing.
The possibility of South African liquidation procedures interfering with the CFTC’s action is another intriguing detail that the CFTC discusses.
This is based on a South African court judgment that stays parallel actions against Steynberg as part of the liquidation process.
If Steynberg is the subject of a South African order stopping all proceedings, this order lacks full faith and credit under the U.S. Constitution and has no bearing on the current proceedings until the Court upholds the order’s legality and grants its effect.
The CFTC’s prosecution of its civil fraud action against the defendants would fall under the governmental unit exception to protect the public from fraud, to the extent that a South African stay order is applicable here and comparable to an automatic stay resulting from a defendant’s bankruptcy petition.
In South Africa, civil liquidation processes have so far just been a waste of time and money.
I concur with the consensus that Steynberg must be extradited to the US for justice to be served.
On the financial front, although the CFTC’s case against Steynberg is undoubtedly complex, progress is at least being made.
The Marks criminal family and other insiders received the majority of the $1.7 billion that MTI collected. This isn’t even their first Ponzi; Cheri Marks was the mastermind behind BTC Global, a Ponzi scheme that lost more than $80 million in 2018.
The MTI insiders and the Marks crime family are still at large in South Africa. Authorities haven’t yet initiated any recovery measures.
Additionally, specifics of the criminal procedures in South Africa against Steynberg, which resulted in the international arrest warrant, haven’t been made public.