Mirror Trading International CEO Johann Steynberg reportedly had unauthorised computer and Internet access while detained in the Brazilian state of Goiás.
The allegation comes from Goiás Penal System Employees Union president Maxsuel Miranda das Neves, who demanded an explanation from Goiás Penal Police director-general Josimar Pires Nicolau do Nascimento.
Local news outlet Goiás 24 Horas first reported Miranda das Neves' allegations, saying that Steynberg was allegedly working to preserve his ill-gotten wealth from inside the prison warden's office.
“Peixe graúdo, cheio de privilégios — A big fish flush with privilege,” it reported.
Mirror Trading International (MTI) was a Bitcoin-based network marketing scam that began in South Africa in 2019 and drew in members worldwide.
It promised to grow “investors'” Bitcoin with monthly yields averaging 10% and offered a way for members to earn substantial bonuses by recruiting MORE people into the scheme.
MTI's membership exploded in 2020 during the Covid-19 lockdown.
Acting judge in the Western Cape High Court, Alma de Wet, ruled in April this year that MTI was an unlawful scheme, calling it a pyramid and a Ponzi-type scam.
Attempts to appeal De Wet's ruling have failed.
Former MTI referral programme head and 50% shareholder Clynton Marks applied twice to appeal the ruling. Neither application was granted.
Previous court documents estimated that 29,421 bitcoins flowed through the scheme.
Sources with knowledge of the case told MyBroadband the actual number is closer to 46,000 bitcoins.
Most recently, RSG Geldsake with Moneyweb (Afrikaans wordplay “money-matters” or “money-business”) reported that around 39,000 bitcoins had been deposited into the scheme and 32,000 withdrawn — leaving a difference of roughly 7,000 bitcoin.
Regardless of which number you use, MTI is the biggest pyramid or Ponzi-like scheme in South Africa's history.
Using the current bitcoin price of around R840,000, even the lower estimate values MTI at R24.7 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.
Africrypt, despite the hype, is not even a contender.
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, 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.
Speculation abounded. Some believed he 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 loved his wife put stock in theories that “the man”, Russians, or Freemasons had got to him.
Disinformation circulated at the time sought to fuel these conspiracy theories.
Regardless, after Steynberg vanished all withdrawals from MTI also halted and the scheme collapsed. Liquidation proceedings were instituted shortly thereafter.
Almost exactly a year later, Steynberg resurfaced — this time in Brazilian news reports excitedly proclaiming that a cryptocurrency scam kingpin from South Africa had been arrested.
Goiás police had reportedly located Steynberg in the state capital of Goiânia and arrested him for using forged identity documents.
He was tried and found guilty. While his sentence was commuted to a substantial fine, it appears that Steynberg remains in custody pending extradition proceedings.
Court documents revealed that Steynberg had been living the high life while hiding in Brazil, including using a helicopter for leisure transportation.
He also bought properties under the names of two girlfriends whose company he had kept at different times while living in different cities.
Interestingly, Maxsuel Miranda das Neves' recent allegations about Steynberg's special prison privileges mention a wife — not girlfriend.
Neves claimed Steynberg's wife can access the prison without needing an appointment. He specifically uses the word “esposa” in his allegations — the formal Portuguese word for a female spouse.
He also alleged that on at least one occasion, Steynberg and his lawyer were alone in the prison director's office, where there was computer and Internet access.
Neves said the authorities must answer whether he used the computer because he is internationally accused of cryptocurrency-related fraud.
The Goiás State General Directorate of Penitentiary Administration told Portal do Bitcoin that they have launched an internal investigation to investigate Neves' complaint.
“The Penal Police reaffirms that [this] is being investigated with seriousness and due regard for the law. The results will be disclosed at the end of the investigation,” the agency stated.
“Finally, [the Directorate] reiterates its belief in the serious and upright work of the employees of this institution, who have done a lot for public safety in the State of Goiás.”
MyBroadband contacted Steynberg, Maxsuel Miranda das Neves, and Josimar Pires Nicolau do Nascimento for comment. None of the men responded by publication.
Thanks to Ted Lasso (real name not used) for locating the Brazilian news reports of Maxsuel Miranda das Neves' allegations.