After signalling its intent to serve Johannes Steynberg via the Hague Conference final month, the CFTC has now requested for permission to impact alternate service.
If granted, the CFTC will serve Steynberg by way of a Texas newspaper and the Supreme Court docket of Texas’ web site.
Johannes Steynberg is CEO of Mirror Buying and selling Worldwide (MTI).
MTI is a collapsed Ponzi scheme, believed to be run by Clynton and Cheri Marks (proper).
Each Steynberg and the Marks are South African nationals.
Following MTI’s collapse in late 2020, Steynberg fled to Brazil.
Brazilian authorities arrested Steynberg on a global warrant in December 2021.
Pending extradition Steynberg is believed to have been held in custody at Complexo Prisional de Aparecida de Goiânia, a jail within the Brazilian state of Goiás.
It’s anticipated Steynberg might be finally extradited to South Africa. A possible spanner within the works is pending felony fees towards Steynberg within the US.
Such to the extent any fees exist, Steynberg’s extradition proceedings have up to now been shrouded in secrecy.
The CFTC’s case towards Steynberg alleges MTI was a $1.7 billion Ponzi scheme. It must be famous the CFTC’s regulatory case is civil in nature, that means it has no bearing on Steynberg’s extradition proceedings.
To ensure that the CFTC’s case towards Steynberg to proceed, the regulator must execute service. For the reason that case was filed in July 2022, this has confirmed problematic.
The CFTC has up to now tried to serve Steynberg by way of
- e-mail –> no response;
- his Brazilian attorneys –> no response;
- MTI’s South African attorneys –> “We stopped representing the Ponzi after it collapsed in 2020”; and
- the Brazilian SEC –> “We don’t wish to become involved till Public Prosecutors are completed reviewing the case”
After initially contemplating it, the CFTC has now dominated out Hague Conference service as a result of
these processes might take so long as a 12 months to finish, including appreciable delay to those proceedings and denying defrauded members the reduction sought herein.
On September 1st the CFTC moved for permission to serve Steynberg by way of a discover within the Austin America-Statesman newspaper, and on the Supreme Court docket of Texas’ web site.
Whereas the prospect of Steynberg seeing both of those notices is slim to none, if granted and adopted via, the courtroom will contemplate service on Steynberg to be passable.
At time of publication a choice on the CFTC’s movement stays pending.
One different fascinating tidbit the CFTC addresses is the potential for South African liquidation proceedings interfering with the CFTC’s case.
That is based mostly on a South African courtroom order, a part of liquidation proceedings, staying paralell proceedings towards Steynberg.
To the extent there’s a South African order staying all proceedings towards Steynberg, such an order just isn’t entitled to full religion and credit score underneath the U.S. Structure and has no drive and impact on these proceedings except the Court docket acknowledges the validity of and offers impact to the order.
To the extent a South African keep order is relevant right here and akin to an computerized keep arising from a defendant’s chapter petition, the CFTC’s prosecution of its civil fraud motion towards Defendants would fall throughout the governmental unit exception to guard the general public from fraud.
Civil liquidation proceedings in South Africa have up to now been nothing however a waste of time and sources.
It’s extensively believed, myself included, that except Steynberg is extradited to the US then justice will go unserved.
On the cash facet of issues; Whereas the CFTC’s proceedings towards Steynberg are definitely difficult, progress is at the very least being made.
The vast majority of the $1.7 billion MTI took in went to insiders just like the Marks crime household. And this isn’t even their first Ponzi; Cheri Marks was behind BTC International, an $80 million plus Ponzi that collapsed in 2018.
The Marks crime household and different MTI insiders stay at massive in South Africa. So far authorities have taken no restoration motion.
Moreover particulars of South African felony proceedings towards Steynberg, that led to the worldwide arrest warrant, haven’t been made public.