Death of the boss of South Africa’s biggest pyramid scheme

A Brazilian federal judge has ordered criminal charges against Johann Steynberg dropped after a police investigation found reports about his death to be accurate.

The order, which MyBroadband has seen, was handed down by Judge Silvio Gemaque, who said that Steynberg’s death certificate was added to the case file.

According to photographs of a death certificate that were circulated online, Steynberg died of a pulmonary thromboembolism. He was awaiting his extradition hearing in Brazil.

News of Steynberg’s death was first reported by an established local outlet, O Popular, which said 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 faced extradition to South Africa 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 Western Cape High Court judge 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.

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 around that time, 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.

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.

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

Amelya reportedly covered Steynberg’s rent while under house arrest and visited him regularly on weekends.

Mental health struggles

Steynberg’s lawyer, Thales Jayme, reportedly said that the former MTI 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.

A week later, on 22 April, Jayme said Steynberg died of a massive heart attack.

The death certificate that appeared online shortly after reports of Steynberg’s demise stated that he had 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 (Karine Amelya) told the lawyer that he was behaving strangely.

He called the state emergency medical services, which transported him to Goiânia.

Steynberg was reportedly buried quickly — on the morning of Wednesday, 24 April, in Jardim das Palmeiras, Goiânia.

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

According to the 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.

The National Prosecuting Authority previously told MyBroadband that it could not say whether Steynberg’s mortal remains would be exhumed and repatriated to South Africa.

The size of MTI

Mirror Trading International was a global scheme, and the liquidators are pursuing people who profited from it worldwide.

Correspondence between law firm Schabort & Potgieter and the liquidators has revealed in which countries they have instituted proceedings and where it may still go after scammers.

It lists 84 countries, with the lawyers not pursuing matters further or recommending against it for various reasons in 35.

Reasons for not pursuing include the value of the possible recoveries being too low, challenges locating corresponding attorneys, and where the legal environment was not conducive.

The most recent reports suggest that around 39,000 bitcoins were deposited into the scheme throughout its lifetime and 32,000 withdrawn — leaving a difference of roughly 7,000 bitcoins.

That makes 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 makes MTI a R19.5 billion scam.

At today’s bitcoin price of around R1,075,000, MTI would be valued at R41.9 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.

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