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The CFTC has told the court that it plans to use the Hague Convention to serve Johannes Steynberg.
After failing to serve both defendants, the CFTC declared its intentions in a Status Report dated July 28. South African-based Mirror Trading International was a Ponzi scheme that failed. MTI CEO Steynberg was detained in Brazil in late 2021 after leaving South Africa.
The CFTC describes efforts to serve MTI and Steynberg in their report (right).
According to information provided to the CFTC, Steynberg was detained in Goiania, Brazil in December 2021.
He is currently being held at the Ncleo de Custódia do Complexo Penitenciário de Aparecida de Goiania while he waits to be extradited to South Africa or the US.
The CFTC is unsure of the length of Steynberg’s detention in Brazil, as well as the date of either his release or extradition. I should point out that the CFTC’s inclusion of the US as a potential extradition location is speculation on their part.
It is based on a quoted news story from June 2022. The CFTC’s investigation led to the discovery of a Brazilian court ruling from June 6, 2022, which denied Steynberg’s request for release from custody there and named three lawyers from the Saad & Lima law firm in So Paolo, Brazil, as his local counsel.
The CFTC attempted to serve Steynberg through the law firm of Saad & Lima after learning the identity of Steynberg’s local counsel in Brazil. The CFTC sent an email to Steynberg’s counsel at this firm asking whether counsel would accept service on Steynberg’s behalf.
The CFTC has contacted Steynberg’s Brazilian attorneys, but they have not responded to date.
The CFTC also attempted to contact Steynberg through his last-known South African legal representative, Ulrich Roux and Associates, a Sandton, South Africa-based law firm. In response to the CFTC’s email on July 25, 2022 asking if counsel represents Steynberg in this matter and if counsel will accept service on Steynberg’s behalf, lawyer Ulrich Roux wrote:
“My business represented Mirror Trading International, but we resigned as the legal representatives of the company in December 2020.” I am not aware of any newly appointed counsel or attorneys.
Mirror Trading International had the ardent backing of Ulrich Roux (on the right).
The Ponzi scam was only abandoned by Roux and his discredited legal company after it failed in late 2020. (And, presumably, payments ceased.)
Finally, on July 25, 2022, Steynberg received emails from the CFTC at his last-known email address with copies of the complaint, summons, and civil cover sheet. The email sent by the CFTC to Steynberg has not been returned as undeliverable.
According to the CFTC, Steynberg has not yet replied to the CFTC’s email. The CFTC recommends it as a result of the aforementioned unsuccessful attempts at service.
Then, through the Hague Service Convention, the protracted process of formally serving Steynberg will start. This procedure is anticipated to “cost thousands of dollars,” specifically because legal documents in English must be translated into Portuguese.
The CFTC will deliver the necessary papers and court documents for delivery to Brazil’s Ministry of Justice and Public Safety after acquiring the Portuguese translations. The CFTC is aware that it might take them six months or longer to serve Steynberg and give them the necessary evidence of service paperwork.
It is unknown if Steynberg, who is subject to extradition, will still be in Brazil in six months. The CFTC plans to ask the Court to allow alternative service of process in the event that it is unable to serve Steynberg formally through the Hague Service Convention or in the event that he is released from custody and his whereabouts remain unknown.
The CFTC wants to serve Mirror Trading International through South African liquidators as a corporate defendant. The CFTC has identified the joint South African liquidators of MTI who are looking after its assets with the help of the South African Financial Sector Conduct Authority (“FSCA”).
The CFTC will discuss serving formal process on MTI with the attorneys for the joint liquidators of MTI in the upcoming weeks and will file the necessary proof of service and accompanying paperwork with the Court as soon as practicable.
The majority of the proceeds from MTI’s liquidation have essentially done nothing and have been difficult to cover. The South African authorities continue to take advantage of MTI victims, but the Marks crime family, led by Clynton and Cheri Marks (right), is still at large.
They are thought to be the company’s owners and main beneficiaries. The CFTC will file a request with the Court for alternative service on MTI if it is unable to serve MTI formally through its joint liquidators.
I’ll keep an eye on the CFTC’s MTI case docket for developments.
