The CFTC has requested authorization to effect alternative service after signaling its decision to serve Johannes Steynberg under the Hague Convention last month.
If allowed, the CFTC will serve Steynberg through a Texas newspaper and the website of the Texas Supreme Court. Mirror Trading International’s CEO is Johannes Steynberg (MTI).
MTI is a defunct Ponzi scam that was allegedly conducted by Clinton and Cheri Marks (right).
Steynberg and the Marks are both South African citizens.
Steynberg went to Brazil after MTI failed in late 2020.
Steynberg was detained in Brazil in December 2021 on an international warrant.
Awaiting extradition Steynberg is thought to have been detained at the Complexo Provisional de Aparecida de Goiânia, a jail in the Brazilian state of Goiás.
Steynberg is anticipated to be extradited to South Africa in the future. Steynberg is facing criminal accusations in the United States, which might throw a wrench in the works.
Steynberg’s extradition procedures have thus far been cloaked in secrecy, to the extent that any accusations exist.
According to the CFTC’s allegation against Steynberg, MTI was a $1.7 billion Ponzi scam. The CFTC’s regulatory complaint is civil, which means it does not influence Steynberg’s extradition procedures.
The CFTC must execute service for its case against Steynberg to progress. This has been an issue since the complaint was filed in July 2022.
So far, the CFTC has sought to serve Steynberg through
MTI’s South African attorneys -> “We ceased representing the Ponzi once it collapsed in 2020”; and the Brazilian SEC -> “We don’t want to get engaged until Public Prosecutors finish analyzing the matter.”
The CFTC has now ruled out Hague Convention service after first contemplating it.
These steps might take up to a year to complete, delaying these actions and depriving defrauded participants of the remedy sought herein.
On September 1st, the CFTC requested permission to serve Steynberg by publishing a notice in the Austin America-Statesman newspaper and on the website of the Supreme Court of Texas.
While Steynberg is unlikely to get any of these notifications, if granted and followed through, the court will deem service on Steynberg to be acceptable.
A ruling on the CFTC’s motion was still pending at the time of publishing.
Another intriguing point raised by the CFTC is the possibility of South African liquidation procedures interfering with the CFTC’s case.
This is based on a South African court judgment that stays parallel actions against Steynberg as part of the liquidation proceedings.
To the extent that there is a South African order halting all actions against Steynberg, such an order does not have full faith and credit under the US Constitution and has no force and effect on these proceedings until the Court acknowledges the order’s legality and grants its effect.
To the extent that a South African stay order is applicable here and is analogous to an automatic stay arising from a defendant’s bankruptcy petition, the CFTC’s prosecution of its civil fraud action against the Defendants would fall under the governmental unit exception to protect the public from fraud.
So far, civil liquidation processes in South Africa have been a waste of time and money.
Many people, like myself, think that unless Steynberg is extradited to the United States, justice will be denied.
On the financial front, while the CFTC’s procedures against Steynberg are undoubtedly challenging, progress is being made.
The majority of MTI’s $1.7 billion in revenue went to insiders such as the Marks criminal family. This isn’t even their first Ponzi scheme; Cheri Marks was behind BTC Global, an $80 million+ Ponzi scheme that failed in 2018.
The Marks criminal family, as well as other MTI insiders, are still on the loose in South Africa. Authorities have taken no recovery action so far.
Furthermore, no information about the South African criminal procedures against Steynberg that resulted in the international arrest warrant has been made available.
Update, September 10, 2022 – On September 6th, the CFTC’s Motion for Service by Publication was granted.
Update 1st October 2022 – On September 12th, the CFTC affirmed Service by Publication on Steynberg.