Boss of South Africa’s biggest pyramid scheme in history reportedly dies

Former Mirror Trading International CEO Johann Steynberg has seemingly died of a pulmonary thromboembolism while awaiting his extradition hearing in Brazil.

Brazilian news publication O Popular reports that Steynberg was under house arrest on a farm in Pirenópolis in the state of Goiás.

Pirenópolis is around 130km Northeast of the state capital, Goiânia, where Steynberg was arrested in December 2021.

He was reportedly transferred to house arrest after he was found guilty of using forged documents when asked for identification by state police.

Steynberg was sentenced to a fine of around R595,000 at the time.

Despite the aggravating circumstances of his crime, Steynberg’s 3-year and six-month prison sentence was commuted to an additional fine to be paid to a court-designated charity.

While he would serve no prison time for fraud, forgery or uttering, his legal team appealed the ruling. He was also remanded to custody pending his extradition hearing.

Steynberg faced extradition for his role in the Mirror Trading International (MTI) pyramid scheme.

MTI was a Bitcoin-based network marketing scam that began in South Africa in 2019 and drew in members worldwide.

It promised to grow members’ bitcoin with monthly yields averaging 10% and offered a way for them to earn substantial bonuses by recruiting more people into the scheme.

MTI’s membership exploded in 2020 during the Covid–19 lockdown.

Acting judge in the Western Cape High Court, Alma de Wet, ruled last April that MTI was an unlawful scheme, calling it a pyramid and a Ponzi-type scam.

Attempts to appeal her ruling have failed.

Previous court documents estimated that 29,421 bitcoins flowed through the scheme.

Sources with knowledge of the case told MyBroadband the actual number is closer to 46,000 bitcoins.

More recent reports suggest that around 39,000 bitcoins had been deposited into the scheme and 32,000 withdrawn — leaving a difference of roughly 7,000 bitcoins.

Regardless of which number you use, MTI is the biggest pyramid or Ponzi-like scheme in South Africa’s history.

Even using the much lower bitcoin price at the time of the scheme’s collapse (or final liquidation) of around R500,000, the lowest estimate values MTI at R14.7 billion.

At today’s bitcoin price of around R1,250,000, the lower 29,421-bitcoin estimate values MTI at R36.8 billion.

For comparison, the recent BHI Trust Ponzi scheme has been valued at around R3 billion.

Travel Ventures International was reportedly a R4 billion pyramid scheme.

South Africa’s infamous “Bitcoin Brothers” (Africrypt), despite the hype, are not even a contender.

MTI made headlines in September 2020 when a group calling itself Anonymous ZA exploited vulnerabilities in the scheme’s poorly-coded website.

Together with a MyBroadband investigative journalist and community members, the group exposed the inner workings of MTI.

Financial regulators globally also started issuing warnings against MTI, including South Africa’s own Financial Sector Conduct Authority, which orchestrated a dawn raid of its offices.

As the noose tightened, Steynberg travelled to Brazil and went missing in December 2020.

Speculation abounded. Some believed he had absconded with everyone’s money, others that he had been killed.

Those who continued to believe in Steynberg’s character as a good Christian man who would never leave his wife and child put stock in theories that “the man”, Russians, or Freemasons had got to him.

Disinformation circulated at the time sought to fuel these conspiracy theories.

Regardless, after Steynberg vanished all withdrawals from MTI also halted and the scheme collapsed. Liquidation proceedings were instituted shortly thereafter.

Almost exactly a year later, Steynberg resurfaced — this time in Brazilian news reports excitedly proclaiming that a cryptocurrency scam kingpin from South Africa had been arrested.

Court documents revealed that Steynberg had been living the high life while hiding in Brazil, including using a helicopter for leisure transportation.

Police said they reviewed text messages on Steynberg’s confiscated iPhone and found he kept in touch with several individuals for whom he managed cryptocurrency investments, conducting transactions on their behalf.

In addition to buying forged identity documents, police testified that Steynberg asked his supplier (“Rodrigo”) for false vaccination certificates.

Rodrigo also apparently offered to supply cocaine, which Steynberg accepted. Police reported that Rodrigo sent Steynberg a picture of the product, describing it as “pure”.

Steynberg also bought properties under the names of two girlfriends whose company he had kept at different times while living in different cities.

Later reports out of Brazil would refer to his most recent paramour, Karine Amelya dos Santos, as his wife.

This week’s report in O Popular stated that Steynberg received visits from his wife on weekends and that she covered the farm’s rent.

However, Steynberg already has a wife and child in Polokwane.

Mental health struggles

Quoting Steynberg’s lawyer, Thales Jayme, O Popular reported that MTI’s former CEO had been facing a series of escalating mental health problems.

Jayme reportedly took Steynberg to a doctor on 15 April, when he was diagnosed with a severe case of anxiety (directly translated: “panic syndrome”).

A week later, on 22 April, Jayme said Steynberg died of a massive (“fulminante”) heart attack.

A death certificate that appeared online shortly after this article was published suggests that Steynberg suffered acute respiratory failure followed by sudden death due to a massive bilateral pulmonary thromboembolism.

It also noted that he was a chronic smoker.

According to Jayme, days before he died, Steynberg’s wife told the lawyer that he was behaving strangely.

He called the state emergency medical services, which took the man to Goiânia.

Steynberg was reportedly buried Wednesday morning in Jardim das Palmeiras, Goiânia.

Jayme said he was awaiting a review by the National Committee for Refugees, which was handling the extradition case.

MyBroadband contacted Jayme for comment, but he did not respond.

According to an official report of Steynberg’s death, his wife (Karine Amelya) declared that he did not have any assets to be inventoried and that she was unaware of the existence of a will.

She said he lived in a stable union with her and that they had one minor daughter.

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Thanks to Ted Lasso (real name not used) for the tip.