One of the stupidest things I’ve ever had to report on is South Africa’s attempt to control MLM Ponzi schemes through a flawed liquidation procedure.
The South African Revenue Service, the nation’s tax enforcement agency, recently displayed astounding stupidity by attempting to embezzle the entirety of the seized money.
The SA government found time to send MTI’s liquidators a tax bill for R580,441,463.28 ($34.46 million USD) despite failing to fine the scammers behind Mirror Trading International and keeping suspect MTI owners Clynton and Cheri Marks in possession of hundreds of millions in allegedly stolen money.
According to Jan Vermeulen of MyBroadband, the tax would almost completely eat up the money the scheme’s liquidators have so far recovered if it were to be collected.
You would be mistaken if you believed that this could be disputed, as we have seen with receiverships in the US. The disputed money was taken as part of civil liquidation procedures that were started as a result of the failure of Mirror Trading International. In other words, there was no involvement on the part of South African authorities.
In contrast to its hesitation to control MTI or to detain anyone involved, the South African government is lethally adept at profiting off the work of others.
In a letter, SARS instructed the liquidators that they must pay the entire amount immediately and may contest it later.
SARS issued a warning, stating that it would still impose interest and that objections and appeals do not prevent the sums from being collected.
Right. And how many more years in court will it take to convince SARS that the money from the Ponzi scheme should go to the victims rather than the government coffers?
It was left to Brazilian authorities to apprehend Johann Steynberg after failing to hold anyone accountable for the Marks’ previous Ponzi, BTC Global, and allowing Mirror Trading International to grow to $1.8 billion.
Steynberg, who assisted the Marks in running MTI, is in danger of being sent back to South Africa. Criminal charges that are still pending have not been publicly disclosed.
I won’t lie; I don’t have high hopes. The South African government wants to take possession of MTI’s assets and otherwise ignore the $1.8 billion Ponzi scheme.
The hundreds of millions they stole will be given back to the Marks crime family. After being extradited to South Africa, Johann Steynberg unexpectedly vanishes, and that’s all.
I’m in the strange position of protesting government regulators. Usually, I’m explaining to Ponzi scheme victims why it’s in their best interests to let justice be served.
There is no justice when it comes to Mirror Trading International and South Africa. A flawed regulatory system has failed victims for more than two years and has continued to do so while protecting known local offenders.