Cryptocurrency10.05.2024

South African crypto scam boss was fighting extradition from Brazil until he died

Mirror Trading International’s late CEO Johann Steynberg was fighting extradition from Brazil before his apparent death of a pulmonary thromboembolism on Monday, 22 April 2024.

The National Prosecuting Authority (NPA) confirmed to MyBroadband that it transmitted an extradition request to Brazil, which Steynberg was opposing in court.

“South Africa has requested the Brazilian authorities to advise on the grounds for opposition, and the response is yet to come,” an NPA spokesperson told MyBroadband.

Regarding whether Steynberg’s mortal remains would be exhumed and repatriated to South Africa, the NPA said it could not answer the question.

Mirror Trading International (MTI) was the biggest pyramid scheme ever operated in South Africa.

The bitcoin-based network marketing scam launched in 2019 and drew in members worldwide by promising average monthly returns of 10%.

It also offered a way for members to earn substantial bonuses by recruiting more people into the scheme.

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

At the current bitcoin price of around R1,180,000, this becomes R34.7 billion.

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.

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.

After disappearing, all withdrawals from MTI halted and the scheme collapsed. Liquidation proceedings were instituted shortly thereafter.

Speculation abounded. Some believed Steynberg 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.

Almost exactly a year after vanishing, Steynberg resurfaced in Brazilian news reports proclaiming that a cryptocurrency scam kingpin from South Africa had been arrested.

Johann Steynberg’s last public appearance (from São Paulo, Brazil) during a monthly MTI leadership Q&A Zoom call

According to court filings, Steynberg was arrested for presenting Goiás state police with forged identity documents.

Steynberg’s previously public fraud and extradition court records were sealed as the cases progressed. This blocked anyone but the officials involved from accessing the court documents.

However, court filings appeared in unofficial online repositories when he was found guilty of using forged identity documents.

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.

In total, he was sentenced to a fine of around R595,000.

Although he would serve no prison time for fraud, forgery or uttering, his legal team appealed the ruling.

While there was mention of an application for house arrest, suggesting he was being remanded to custody for his extradition hearing, further details were scant.

When news of Steynberg’s death emerged on 24 April, established Brazilian newspaper O Popular reported that he 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.

MacBook Pro laptops, iPhone 12, and other items confiscated during MTI CEO Johann Steynberg’s arrest

The Ronnie Biggs speculation

While the NPA was awaiting word on what grounds Steynberg would oppose his extradition, speculation abounded that he had fled to Brazil to attempt a Ronnie Biggs-inspired scheme.

Biggs was an English criminal who helped plan and execute the Great Train Robbery of 1963.

He escaped to Brazil, which did not have an extradition treaty with the United Kingdom then.

When the United Kingdom applied for his extradition, it was denied because his Brazilian girlfriend was pregnant, and the country’s laws did not allow a parent of a Brazilian child to be extradited.

Court documents show that Steynberg had at least two girlfriends in Brazil despite having a wife and child back home.

His second girlfriend, Karine Amelya dos Santos, has been referred to as his wife in media reports and official documentation.

The official report of Steynberg’s death also contains a declaration from his Brazilian wife that they have one minor daughter.

It is unclear if Steynberg knew the “Ronnie Biggs law” had been amended to plug this loophole.

Johann Steynberg, former Mirror Trading International CEO

NPA commended

Rapport recently reported that law firm BDK was involved in the extradition application on behalf of MTI’s liquidators.

BDK attorneys Ian Small-Smith and Piet du Plessis were reportedly attached to the case, and Small-Smith had attempted to convince Steynberg to return to South Africa.

Steynberg was apparently unconvinced by assurances that he would be safer in a South African jail.

“I tried hard to convince him to withdraw his appeal and return to South Africa,” Rapport quoted Small-Smith as saying.

“Here, he would’ve received a decades-long prison sentence, but he would be safe, and the liquidators could work with him to recover the stolen money.”

Small-Smith also had nothing but praise for the NPA.

“Many people gave the NPA’s extradition team a hiding, especially around the Guptas, but I was very impressed with the work they did to try and get Steynberg back.”

MyBroadband contacted Small-Smith for comment, but he did not provide feedback by publication.

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