One of the kingpins in South Africa’s biggest pyramid scheme could lose his house

One of the highest-ranking members in the collapsed Mirror Trading International (MTI) pyramid scheme could lose two multi-million rand properties allegedly acquired with ill-gotten gains.

The liquidators of MTI have obtained an urgent order to provisionally wind up Uprobuzz, a company they allege Clynton Marks used as a conduit for his unlawful profits.

MTI was the biggest pyramid scheme ever operated in South Africa.

It launched in 2019 and drew in members worldwide by promising average monthly returns of 10%. It also offered ways for members to earn substantial bonuses by recruiting more people into the scheme.

Even using the most conservative estimates for the scheme’s value at the time of its collapse, at least R14.7 billion worth of bitcoin flowed through it.

This dwarfs all other South African pyramid and Ponzi-type schemes for which estimated deposits are available, including Krion, Travel Ventures International, and the Africrypt “Bitcoin Brothers”.

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.

The leaked data showed that Marks occupied two of the topmost positions of MTI’s pyramid.

Curiously, he appeared to be higher up than the late founder and CEO, Johann Steynberg. Steynberg was declared deceased by Brazilian authorities earlier this year after apparently suffering a pulmonary thromboembolism.

In their original court papers applying to have Uprobuzz wound up, the liquidators noted that Marks was the Head of Referral Programme and Members for MTI.

His life partner at the time, Cheri Ward, was head of communications and marketing. Based on Ward’s social media posts, she and Marks have since split.

The liquidators also said Marks was among the top three investors in MTI, having deposited approximately 22 bitcoins.

According to their investigation, he pocketed a tidy profit, withdrawing 220 bitcoins before the scheme collapsed, worth roughly R74.9 million on the day MTI was liquidated.

“All of his so called profit and returns accrued to him within the scheme from bitcoin subsequently invested by others, and his riches resulted to the detriment of the losers,” the liquidator alleged.

They said Marks milked MTI until the very last moment despite knowing of the imminent collapse of the scheme.

“Even if one is to take only the value of bitcoin as at date of liquidation for purposes of comparison and multiply that value with the total amount of bitcoin invested by Mr Marks, his so-called ‘profit’ to the detriment of MTI and the losers, was in excess of R65 million.”

In addition to these profits, the liquidators said they established that Marks and two accomplices withdrew and misappropriated MTI member deposits worth at least R19.45 million to buy two properties through Uprobuzz.

According to the liquidators, Steynberg, Marks, and one of Marks’ alleged accomplices had access to and transactional authority over MTI’s Bitcoin wallets.

Although Uprobuzz was registered in this alleged accomplice’s name, the liquidators said it all linked back to Marks. The accomplice could not be reached for comment.

“Uprobuzz was registered as a vehicle for Marks with the specific purpose of holding and accumulating assets as a conduit / front for him and Cheri,” they said.

“This was to avoid that such assets are registered in their personal name and in order to obfuscate and conceal their conduct and indeed their consequentially acquired assets, from the outside world.”

The first property purchased through Uprobuzz was a plush house in Monteith Estate in Durban North, with an estimated market value of R11.5 million at the time.

The second property is in Pietermaritzburg and is known as Portion 1726 of Farm Cotton Lands.

According to the liquidators, Uprobuzz is indebted to the estate of MTI as funds belonging to members were used to purchase the properties.

For this reason, the liquidators said they moved to salvage possession of the assets.

MTI’s liquidators explained in great detail how the transactions were executed to show that the bitcoins used to acquire the properties were allegedly misappropriated from the MTI wallets.

Their initial application for Uprobuzz’s liquidation comprises 1,574 pages and includes communications between Marks and those who helped facilitate the transactions, as well as hundreds of pages analysing the Bitcoin wallets involved.

MyBroadband asked Clynton Marks and Cheri Ward for comment and neither responded by publication.

When Carte Blanche asked them about the Monteith Estate property for a segment it broadcast in 2021, they responded with the following statement:

There is nothing sinister in residing in a home owned by a friend. Our clients relocated to this particular home to be close to the 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. Our clients are being threatened daily by investors and although it is understandable why investors are upset, they are used as the “scapegoats: because they did not go into hiding. For the record any funds utilised by our clients are proceeds from trading done outside of MTI.

The return date for Uprobuzz’s liquidation hearing is 9 December 2024.