Mirror Trading International’s liquidation has degenerated into a dispute between liquidators and the government.
BehindMLM previously revealed that SARS, the South African counterpart of the IRS, demanded $34.46 million from liquidators. This number is close to the total amount collected to date.
SARS intensified its efforts to interfere in MTI’s liquidation procedures last week.
According to a motion filed by SARS on October 26th, the tax authority asserts that it is “by far the largest creditor of MTI.”
As a preferential creditor, SARS has the most significant financial stake in the liquidation of the MTI.
To expedite proceedings, SARS has requested the appointment of a co-liquidator.
An independent co-liquidator will be able to determine whether the inquiry procedures… are warranted and if these actions are in any way advantageous to creditors and, in particular, to SARS.
It appears that no fewer than seven commissions have been constituted to examine the activities of MTI, that a large number of witnesses have testified, and that the record comprises tens of thousands of pages.
Now, the legal fees must be quite high.
The continuance of the unfettered investigation processes just erodes the free residue that SARS would otherwise receive.
It is essential to understand that this is not a noble effort by SARS to maximize the recovery of MTI’s victims.
As far as SARS is concerned, MTI, a $1 billion-plus Ponzi scam that the South African government did nothing about, owes them fraud-related taxes.
In essence, the South African government competes with the victims of Mirror Trading International. And the real regulatory agencies, FSCA and Hawks (South Africa’s FBI counterpart), are allowing it to occur.
In response to SARS’s request to intervene, the liquidators released a statement saying “they owe (SARS) nothing.”
In a statement released on Monday, MTI liquidators stated that after receiving an R931 million creditor demand from Sars, they responded by submitting tax filings indicating no tax due.
“This is the first move taken by the liquidators to begin the objection procedure against the claim presented by Sars, which is great news for people who lost money due to fraud,” the liquidators’ statement reads.
I will not pretend to comprehend the importance of liquidators submitting tax returns on MTI’s behalf. As an alternative to South African authorities performing their duties, I maintain that the entire MTI liquidation procedure is a waste of time.
To truly understand why I will conclude with two points.
Here’s why MTI’s liquidators must file tax returns:
Bitcoin (BTC) placed by several hundred thousand scheme participants was utilized as security for trading contracts for difference (CFDs), a form of derivative contract that monitors price movements of underlying assets such as FX pairs, according to the liquidators.
These CFD price fluctuations are commonly compounded by leverage.
Mirror Trading International was a $1 billion pyramid fraud. There was no exchange taking place.
Then, on October 23, MTI owner and leading net winner Clinton Marks intervened.
Marks seeks to intervene in the MTI liquidation proceedings based on his status as a shareholder.
Marks contends that liquidation proceedings should be halted due to the terms and circumstances of MTI.
The Applicants in the main case also deceived the court by attaching the wrong version of the MTI terms and conditions to the Founding Affidavit, which is another fundamental reason why the intervention relief should be granted.
Does it matter? Mirror Trading International was a $1 billion pyramid fraud. It is immaterial what MTI’s terms and conditions said or did not express.
No arrests have been made by South African police as of yet. The Marks criminal family, chiefly responsible for a billion dollars in customer losses, is at large and openly resides in South Africa on their ill-gotten money.
Johann Steynberg, CEO of MTI, was arrested in Brazil in January 2022. He is still awaiting extradition.