Mirror Trading International liquidators claim R4,6 billion from 18 masterminds

The joint liquidators of Mirror Trading International is claiming R4 666 077 528 from 18 masterminds involved in the scheme called the biggest scam ever.

The four billion six hundred and sixty-six million, seventy-seven thousand and five hundred twenty-eight rand will enable the liquidators to pay MTI’s debts to its creditors.

The six joint liquidators also filed alternative claims with the Pretoria High Court to obtain an order that declares the insolvent estates of kingpin Johann Steynberg and the 17 other defendants liable, jointly and severally, to pay to the liquidators R4 666 077 528, plus interest of 7% per year.

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The masterminds of Mirror Trading International

The claims include an order declaring that the insolvent estate of Steynberg, represented by Jacques André Fischer and Reunert Ndivhuho Kharivhe, as well as 17 other defendants, are liable in terms of section 424 of the Companies Act for all the debts and liabilities of MTI. The other 17 people are:

• Charles Thomas Ward
• Monica Coetzee
• Joseph Usher Bell
• Frederik Coenraad Rademan
• Clynton Hugh Marks, who owns 50% of MTI and his wife, Cheri Marks, who was responsible for the marketing of the scheme
• Maria Matshidiso Ramanamane
• Thomas William Fraser
• Elizabeth Kathleen Malton
• Romano Lorenzo Samuels
• Jacobus Eckley
• Vincent Ward
• Leonard Wesley Gray
• Andrew Gran Caw
• Nerina Steynberg, wife of Johann Steynberg
• Gerald Lassen
• Don Nkomo

The liquidators are also seeking an order declaring that Steynberg and the defendants named above are liable for all the liabilities and losses incurred by MTI.

They are also asking the court set aside the depositions made by MTI to Steynberg and the people named in the list of defendants, except Rademan, in terms of the Insolvency Act.

ALSO READ: Application to declare Mirror Trading International unlawful postponed

These are the amounts that the masterminds must pay back

They are also asking that the defendants be ordered to return the amount of bitcoin set out below:

• The first and second defendants as trustees of Steynberg: 31.33569713 bitcoin or R5,427,211.31
• Charles Ward: 7.89112396 bitcoin or R1,878,562.02
• Coetzee: 0.31107597 bitcoin or R66,541.10
• Bell: 25.78292183 bitcoin or R4,586,609.95
• Clynton Marks: 289.8723002 bitcoin or R58,528,749.14
• Cheri Marks: 43.80773142 bitcoin or R8,967,379.82
• Ramanamane: 2.24362727 bitcoin or R455,884.34
• Fraser: 14.5176913 bitcoin or R4,004,859.66
• Malton: 60.32592343 bitcoin or R14,082,534.54
• Samuels: 0.21419153 bitcoin or R39,959.50
• Eckley: 1.50924551 bitcoin or R215,612.29
• Vincent Ward: 0.117429 bitcoin or R18,308.00
• Gray: 0.04150939 bitcoin or R10,511.90
• Caw: 13.80847603 bitcoin or R2,385,249.71
• Nerina Steynberg: 12.37610148 bitcoin or R2,203,666.76
• Lassen: 43.12869094 bitcoin or R8,867,417.14
• Nkomo: 4.37671854 bitcoin or R762,713.68.

These values were calculated on the value of the bitcoin on the date of each disposition by MTI to Nkomo, or the value of the bitcoin disposed of to Nkomo at the date of the order, whichever is greater.

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Presentations and lies at Mirror Trading International

According to the abstract of the liquidators’ heads of argument filed with the court, Steynberg and the other defendants who were part of the MTI “the management and marketing team,” told people that the investors’ bitcoin were pooled and held in one account with a broker.

They also said that MTI is trading very profitably on trading platforms, making daily profits, that MT has never made a loss, except for one day, the bitcoin trading pool is growing every day and MTI’s bitcoin investments are continuing to grow by at least 1,5% per month.

In addition, they said MTI was able to produce positive trading results every day due to an exceptional electronic code or bot coded by Steynberg or someone he appointed.

This bot had artificial intelligence and could project foreign currency trades with such accuracy that it would, with great precision, predict trading activity in foreign currency (“forex”) markets.

When the FSCA investigated MTI, it found that Steynberg and Cheri Marks, the main promotor of MTI represented to the FSCA and all the MTI investors that:

• Due to concerns from the FSCA, MTI moved the entire bitcoin trading pool from the trader at the time, FX Choice, where it was allegedly held, to a new trading platform called Trade 300, because Steynberg, was worried that FX Choice may freeze all the bitcoin it held
• Trade 300 was not a licensed forex trader
• The bitcoin frozen at that stage in the FX Choice account, approximately 1,282 bitcoin, were not part of MTI investors’ bitcoin but belonged to Steynberg
• MTI moved the bitcoin of 16 444 bitcoin in four transfers from 21 July 2020 to 24 July 2020.

These representations were false because:

• MTI did not move the bitcoin from FX Choice as MTI’s account was frozen
• Trade 300 was not a broker and only Steynberg’s alter ego
• The bitcoin frozen by FX Choice did not belong to Steynberg but to MTI and formed part of the so-called trading pool of bitcoin invested by members of MTI.

ALSO READ: Billions worth of bitcoin found as MTI is placed in final liquidation

And more lies

The investors’ bitcoin, as pooled in MTI, was not transferred immediately to any FX trader account but, instead diverted to accounts Steynberg and the management and marketing team controlled, most notably by the Marks couple or diverted to a bitcoin wallet, held and controlled by MTI, Steynberg and the management and marketing team or paid into Cloudbets, a gambling service.

There were no profits on any trading platform and all daily trading reports, reports that MTI investors’ bitcoin grew every day as a result of trading profits and by way of trading bonuses, reports that MTI had continuously traded profitably, reports that a bot with artificial intelligence affected the trading of MTI’s bitcoin and reports that the bot traded in real-time were false.

Contrary to what was represented to MTI investors and the public, MTI never achieved any growth in bitcoin as a result of trading activities, it could never reflect such growth in bitcoin to investors and MTI could never, from any bona fide trading activities, pay investors their bitcoin withdrawals and growth in bitcoin. MTI simply used bitcoin received from later investors to pay earlier investors.

The difference between bitcoin deposited in and withdrawn out of MTI is at least 6,900 bitcoin, with a present rand value of approximately R676,243.12 per bitcoin, a total unaccounted-for loss of R4,666,077,528.00.

The number of bitcoin which was supposed to be in MTI in December 2020 and which MTI represented to its investors and the public it had when it imploded and was placed in liquidation was approximately 22,222.548 bitcoin at a present rand value of approximately R600,000.00 per bitcoin, with a total rand value of approximately R13,333,528,800.00.

ALSO READ: MTI bitcoin scam: Liquidators chasing additional R2bn in ‘possible debtors’

Mirror Trading International was an unlawful business

The liquidators also state in their court papers that MTI was an unlawful business because it rendered financial services without the necessary licence issued by the FSCA, acted as a Over-The-Counter Derivative Provider and provided, as part of its business, a financial service or market infrastructure in contravention of the provisions of the Financial Sector Regulation Act.

MTI also conducted a collective investment scheme without being registered as a manager, directly or indirectly promoted, knowingly joined, or entered into and participated in a fraudulent financial transaction in contravention of the Consumer Protection Act.

Having conducted an unlawful Ponzi scheme, MTI was factually insolvent from inception.

Other reckless or fraudulent trading included defrauding the MTI creditors, no corporate governance, no transparent financial accounting or bookkeeping and no registration for MTI employees’ tax or Value Added Tax.

The liquidators also pointed out that Steynberg and Clynton Marks shared between them 10% of the “profit” of MTI weekly, Family members of Steynberg and the Marks couple were put in charge of the top management structure without any suitable qualifications, while most of them were involved in previous unlawful schemes, including BTC Global.