Allegations, denials, and contradictions in multi-billion MTI saga

Two leaders of Mirror Trading International (MTI), Clynton and Cheri Marks, have denied allegations that the company’s leadership conspired to locate and kidnap its missing CEO, Johann Steynberg.

Mirror Trading International was a scheme that claimed to offer automated trading services — initially in forex, and later in cryptocurrency derivatives.

The scheme went through a few iterations, but its surge in growth came after it adopted a multilevel marketing referral system and switched away from more conventional “copy trading” to purportedly using an automated trading program, or “bot”.

MTI and its leadership claimed that this magical “bot” was powered by artificial intelligence and was yielding growth in members’ bitcoin of 0.5% to 1.5% per day.

Many people warned that the promised returns were too good to be true and that MTI was a scheme that would ultimately cost you money.

Several warnings were issued from official bodies, including the Texas State Securities Board, Canada’s Autorité des Marchés Financiers, and South Africa’s Financial Sector Conduct Authority (FSCA).

In its warning from August last year, the FSCA recommended that people withdraw their money from MTI as soon as possible.

MTI collapsed in late 2020, as warned, with the scheme’s leadership blaming Johann Steynberg, who allegedly disappeared in Brazil on 15 December.

A group of members acted quickly and instituted liquidation proceedings against MTI within days of the announcement that Steynberg had gone missing.

The Cape Town High Court granted a provisional liquidation on 29 December 2020 and provisional liquidators were appointed on 12 January 2021.

Leaked MTI leadership Zoom call

A video call involving several members of MTI’s leadership and management was posted on YouTube and leaked on social media in January.

Based on the context of the discussion in the call, it appears to have taken place shortly before the MTI leadership issued a bizarre final statement on 22 December.

During the call, the chief operating officer of MTI informed the leadership that he was working on an “extraction” plan to bring Steynberg back to South Africa.

Steynberg had allegedly flown to São Paulo via Doha on 2 December. One version of events was that he had received an anonymous warning that his life was in danger and he fled South Africa.

The MTI leadership’s plan to get Steynberg back involved tricking his wife into signing over control of their silver holdings worth R1.6 million. This would then be put towards paying an “extraction” team to locate and return Johann Steynberg to South Africa.

Crucially, the plan required that Steynberg’s wife would not know what the silver was being used for.

The relevant clips from the leaked Zoom call are embedded below.

When Carte Blanche asked Clynton and Cheri Marks whether they had plotted together with the rest of the MTI leadership to kidnap Steynberg, they denied it.

Clynton Marks was the head of MTI’s referral programme and members, and Cheri Marks was the head of communications and marketing.

“These allegations are strenuously denied. Our clients, like all investors, are trying to find the whereabouts of Steynberg to answer the fallout of MTI,” stated Henry Selzer of Selzer Law on behalf of the Marks’.

Carte Blanche – Smoke and Mirror Trading International

Carte Blanche contacted the Marks’ to offer them a right of reply on a segment it aired about the rise and fall of MTI on 17 January 2021. The segment is embedded below.

MyBroadband was present for an interview with Brandon Topham, the head of investigations and enforcement at the FSCA.

During the interview, Topham stated that they have evidence which suggests that Steynberg may be in Panama and not Brazil.

Topham issued a grave warning to the perpetrators and victims of schemes like MTI — every member of who withdrew any money from the scheme will have to pay the money back to liquidators.

It has also emerged that the number of people who were scammed through MTI is far fewer than the scheme’s official membership figures may suggest.

This is because many people opened multiple accounts in MTI.

Advocate Vaughn Victor, who has helped lead the legal charge against MTI, stated that the number of individual members is between 48,000 and 60,000.

Contradictory responses to Carte Blanche

Carte Blanche’s questions to Clynton and Cheri Marks were wide-ranging, covering everything from the exclusive “Founder’s Pool” to directly asking whether they are serial scammers.

The following table summarises some of the statements made by the Marks’ alongside their apparent contradictions.

Founders Pool

In September, MyBroadband reported on a group calling itself Anonymous ZA which leaked an anonymised copy of MTI’s entire database — including account names, e-mail addresses and bitcoin balances. They called it the MTILeaks.

The MTILeaks showed that as of 14 September 2020, MTI had received 22,984 bitcoin in deposits.

Before the surge in the price of bitcoin towards the end of 2020, this was worth around R6.4 billion. At current exchange rates this amount of bitcoin is worth around R13 billion.

One of the many problems exposed by the MTILeaks was the existence of a previously undisclosed “Founders Pool”.

The Marks’ feedback regarding the Founders Pool was included in the table above. However, one of their statements is worth expanding on.

They said: “10% of the profit share that MTI made was proportionately divided between all [Founder Pool members].”

MTI’s own promotional material stated that profits were split as follows:

• Basic profit-share to all members: 40%
• Binary tree / multilevel marketing “team” bonus: 20%
• Leadership bonus part 1: 2.5%
• Leadership bonus part 2: 2.5%
• Traders’ fee: 25%
• MTI’s fee: 10%

No “Founders Pool” is ever mentioned in any of MTI’s profit-share reports.

In addition to the above earnings structure, MTI also offered once-off referral bonuses where you could earn 10% on all capital deposited into the scheme by people you recruited (within certain restrictions).

MTI said that these referral bonuses were paid out of the 10% fee it collected on all the “trading profits” it generated.

It is not possible for the Founders Pool bonuses and once-off referral bonuses to be paid out of the same 10% fee.

AnonymousZA and the duplicate accounts of MTI

Another major concern exposed by the original MTILeaks was that many MTI members, including those on the management team and in the Founders Pool, had multiple accounts registered in their name and linked to the same email address.

MTI’s terms and conditions state:

You will not promote, take part or assist any other person/s in any activity to destabilize the binary system or Bonus Plan or to obtain any undue financial gain through activities such as rolling deposits and/or other similar types of unethical financial behaviour.

And:

Bonus manipulations are forbidden including but not limited to rolling deposits. It is forbidden among others to sponsor new members, who actually does not perform business activity connected to MTI (so-called strawman), furthermore either open or hidden multiplied registrations. It is forbidden to use the name of spouses, relatives, business names, legal entities and third parties, in order to evade this provision.”

Following the publication of the MTILeaks, Cheri Marks took to Facebook to defend herself and MTI stating (also see screenshot) that MTI does not allow multiple accounts.

Marks also said in a video on YouTube that a single email address being shared by multiple accounts is hardly evidence of wrongdoing.

According to Marks, MTI members can use their email address to open accounts for friends and family.

“I have 4 accounts linked to my email. Two for my daughters and 1 for my best friend that has no interest in managing her account,” Marks stated.

However, the MTILeaks told a different story. While they did show that Marks’ personal email address was linked to four accounts, they all appeared to be in her name.

There were also accounts in her daughters’ names linked to an entirely different email address. The MTILeaks suggest that the email address used to create these accounts is linked to several alternative profiles belonging to Clynton Marks.

When MyBroadband pointed out that the leaked data seemed at odds with Marks’ statements on Facebook, Marks said that MyBroadband was jumping to conclusions and questioned our intentions.

“Let’s hypothetically say people have multiple accounts in MTI… Of what consequence is that you or the MTI members [sic]?” Marks said.

“You report on Founder’s bitcoin but you have no idea where it comes from and you have no intention to create an objective news story to properly and accurately report facts.”

It should be noted that Clynton and Cheri Marks were hardly the only members, Founder Pool or otherwise, who had multiple accounts linked to their names and email addresses in the system.

According to Advocate Vaughn Victor the abuse of duplicate accounts was so rife in MTI that even though the scheme claimed to have over 200,000 members, the real figure is likely between 48,000 and 60,000.

How to scam the scam

Why would members create multiple accounts? To boost their earnings by gaming the MTI referral scheme and raking in substantial bonuses.

One of the main ways clued-in members could do this is by withdrawing funds from MTI, then reinvesting it “downline” of themselves, earning a once-off 10% referral bonus on the deposit.

You can then send the funds back to your main account in the MTI system using a peer-to-peer transfer.

This is the rolling deposit scam expressly prohibited by the MTI T&Cs. However, it appears as though a blind eye was turned when certain members did this.

Withdrawing your funds and depositing it into a new account has the additional benefit of helping you amass shares for the MTI Leadership Bonus — Part 1.

MTI introduced the “Leadership Bonuses” on 21 January 2020, which allocated 5% of its “profits” to members based on how many people they recruited into the scheme.

These leadership bonuses were divided into two parts (P1LB and P2LB), with 2.5% of MTI’s “profits” going towards each part of the bonus.

You receive one share of P1LB for every person you recruit who deposits $200. The more people you recruit, the more P1LB shares you receive. Shares are valid for 8 weeks or 60 days.

The more shares you have, the greater the portion of the total P1LB bonus (2.5% of MTI’s “profits”) you receive.

In its video explaining how the leadership bonus pools work, MTI stated: “Fair warning: MTI reserves the right to permanently terminate a member’s P1LB qualification if such member deliberately creates multiple ‘fake’ accounts to qualify for this bonus. Proof of individual account ownership will be asked in such cases.”

To earn P2LB shares, your direct referrals in MTI must qualify for P1LB. Leadership Bonus — Part 2 shares do not expire like Part 1 shares.

Due to the structure of MTI’s referral programme, it was therefore profitable for members to create many duplicate accounts.

“Steven Twain is real”

When MTI announced that Johann Steynberg had disappeared, the news immediately evoked comparisons to a scheme called BTC Global.

Much like MTI, BTC Global promised too-good-to-be-true returns on your investment. It also used a multilevel marketing scheme to rapidly recruit new members.

When the money finally dried up, BTC Global’s alleged founder vanished and the failure of the scheme was blamed on him.

Another interesting similarity between the two schemes is the number of key people that were part of BTC Global and MTI, including Cheri and Clynton Marks.

However, the Marks’ told Carte Blanche that the two schemes were completely different.

“Steven Twain is a real person and his disappearance was a shock,” they said.

“It was Cheri’s first crypto-related business and she was admittedly naïve at the time. It is denied that Cheri was/is Steven Twain.”

They contend that in January 2018, before BTC Global stopped operating, the bitcoin price fell dramatically and there was a well-documented market crash.

“It is suspected that this led to its demise. Cheri was linked to BTC Global in the public domain and that destroyed her reputation in the industry. She decided to pursue a conventional business like MTI which had a visible and present CEO and where one could witness actual trades. BTC Global and MTI are thus erroneously being linked.”

Nothing wrong with living in a friend’s [multi-million rand] house

Throughout their involvement with MTI, the Marks’ posted on Facebook about their financial success.

This included updates about new cars and a move from Johannesburg to Monteith Estate in Durban North.

Deeds office queries revealed that the Marks’ home in Durban North is registered to Uprobuzz (Pty) Ltd, a company which only has one director: Zimbabwean national Ngqabutho Don Nkomo.

Based on photos posted online Nkomo was a known associate of the Marks’. In their recent statement to Carte Blanche, they refer to Nkomo as a friend.

“There is nothing sinister in residing in a home owned by a friend,” the Marks’ said, adding that they relocated to be close to their children’s public school.

“Cheri owns a Jeep – hardly in line with the extravagant lifestyle, some social media posts would like people to believe. This is deliberately spread to manipulate angry and upset members to direct their grievances at someone other than Steynberg,” they said.

The Marks’ said that they are being threatened daily by investors.

“Although it is understandable why investors are upset, [we] are used as the ‘scapegoats’ because [we] did not go into hiding.”

MTI’s meetings with the FSCA

In a video posted immediately after the MTILeaks were published, Marks stated that she saw Steynberg demonstrate live trading and that he showed MTI’s bitcoin balance to the FSCA.

Asked what convinced her that she was witnessing Steynberg demonstrating live trades in MTI’s meeting with the FSCA, Marks told Carte Blanche that she saw Steynberg log into his Trade300 account.

Trade300 is the “unregulated broker” that MTI claimed to be using. The FSCA revealed in December that Trade300 was actually set up by Steynberg under his alias, Joe Steyn.

“He opened live trades while next to [me] and invited the lead investigator to verify the trade. The investigator called another FSCA representative to look at the trades too and then confirmed it was CFD trading,” Marks stated.

The FSCA’s Brandon Topham provided an alternate perspective to the story, saying that he spoke to Steynberg during the meeting and remarked that the demo made it look like MTI was trading derivatives – a regulated financial instrument

According to Topham, Steynberg then asked what a derivative was.

Marks told Carte Blanche that she did not have enough trading knowledge to confirm or deny whether the trades Steynberg demonstrated were valid.

She also said that she saw the correspondence between Steynberg and Trade300. This included answering the requests sent by the FSCA, trade statements, transaction ID codes, and balance confirmations.

Marks said that she had no reason to believe the trades were fictitious.

Criminal charges against AnonymousZA

In the same video posted after the publication of the MTILeaks, Marks stated: “Anonymous ZA — we know who that is and we are pursuing criminal charges”.

Asked about the identity of Anonymous ZA and the criminal charges, Marks said that she was sent information about Anonymous ZAs identity by Steynberg and that she acted on his instructions as an employee of MTI.

“[Steynberg] was meant to lay the charges as he is the CEO of MTI,” Marks stated.

This contradicted an earlier statement from Marks on Facebook where she said that she was part of the team that laid criminal charges.

We didn’t know MTI was a scam

Throughout their response to Carte Blanche, Clynton and Cheri Marks denied knowing that MTI was a scam.

“Steynberg developed the MTI model and systems. He controlled the bitcoin, broker interface and the servers. All employees and heads of department followed the procedures of the system developed by Steynberg,” the Marks’ stated.

They also contend that the vast majority of bitcoin deposited into MTI — 75% — came from Steynberg’s efforts. They did not explain how they got to that figure.

“He had full and uninterrupted control of MTI, he created the logos, first presentations and built the structure to place members for the referral program. It is denied that Clynton and Cheri masterminded MTI because it is simply not true and extremely defamatory.”

Now read: Shock announcement in multi-billion Mirror Trading International bitcoin scheme