Bitcoin scam CEO’s guilty verdict: Forged IDs, lavish lifestyle, and legal battles unveiled

Johann Steynberg, CEO of the Bitcoin-based network marketing scam Mirror Trading International (MTI), has been found guilty in Brazil of using forged identity documents. Steynberg's lavish lifestyle and alleged involvement in financial misconduct have come to light. While his 3-year, 6-month prison sentence was converted to a fine for a court-designated charity, his defence team has appealed. MTI's collapse highlighted the risks of cryptocurrency-related fraud, emphasizing the need for robust regulations to safeguard investors against pyramid and Ponzi-type schemes..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here..Boss of South Africa's biggest pyramid scheme in history found guilty in Brazil — fined R595,000.By Jan Vermeulen.Mirror Trading International (MTI) CEO Johann Steynberg has been found guilty in Brazil of using a forged identity document, with the judge handing down an aggravated sentence..In addition to providing information about Steynberg's criminal trial, court documents also revealed details about his lifestyle while hiding in Brazil — including that he allegedly had two girlfriends under whose names he bought property..Despite the aggravating circumstances of his crime, Steynberg's 3-year and six-month prison sentence was commuted to an additional fine to be paid to a court-designated charity..His defence team has appealed, arguing that he was guilty of a lesser crime with a lighter sentence. They believe Steynberg's offence falls under Article 307 of the Brazilian Penal Code (assuming a false identity), whereas the state prosecuted him under Article 304 for using forged documents..At the same time, the state prosecutor launched their own appeal arguing that Steynberg should receive a harsher sentence..Although unconfirmed, it appears as though the founder of South Africa's biggest pyramid scheme remains in preventative detention pending the conclusion of extradition proceedings..MyBroadband contacted Steynberg's advocates and associates in Brazil for comment and did not receive a response. Attempts to get details from law enforcement directly were also unsuccessful. Steynberg did not respond to emailed requests for comment..MTI was a Bitcoin-based network marketing scam that began in South Africa 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..Acting judge in the Western Cape High Court, Alma de Wet, ruled in April this year that MTI was unlawful scheme, calling it a pyramid and a Ponzi-type scheme..Former MTI referral programme head and 50% shareholder Clynton Marks has filed for leave to appeal De Wet's ruling..Sources with knowledge of MTI's liquidation have told MyBroadband that over 46,000 bitcoin flowed through the scheme..Using a bitcoin price of R565,000, that values the pyramid scheme at nearly R26 billion..According to the liquidators' court papers, when MTI imploded, there was supposed to be 22,222.548 bitcoin in its accounts — around R12.6 billion at current valuations..That makes MTI the biggest pyramid or Ponzi scheme in South Africa's history..The infamous Krion Ponzi scheme was valued at around R1.5 billion in 2009, while Travel Ventures International (TVI) was reportedly a R4 billion pyramid scheme..The value of Africrypt is disputed, but the most realistic estimates valued the scheme at between R200 million and R1 billion..Chainalysis named MTI the biggest cryptocurrency scam of 2020..Read more: Named and shamed: Mirror Trading masterminds on the hook for R4.7bn after SA's largest Bitcoin scam.Steynberg travelled to Brazil in December 2020 and soon went missing..MTI completely collapsed after that, although members had been complaining about delayed withdrawals for several weeks leading up to that point. Liquidation proceedings were instituted shortly thereafter..He was arrested almost exactly a year later, in December 2021..A specialist team of Brazil's Goiás state Military Police called Giro made the arrest..Court papers for Steynberg's forgery case allege he used three false identities after arriving in Brazil:."John"Cleisson Veira da SilveiraEdson Pereira de Almeida.Police say that when they approached Steynberg on the night of his arrest, he presented them with an identity document in the name of Cleisson Veira da Silveira..While the registration data on the card could be verified against the police database, the photo on the ID didn't match Steynberg's face..The papers also reveal that Steynberg had at least two girlfriends during his time in Brazil..According to police testimony, the first girlfriend, Adriele Cristiana Rodrigues Alencar, had witnessed Steynberg using the Cleisson identity..Alencar said she had once met him at a hotel where he had checked in using the name Cleisson..Police reported that Steynberg was with his current girlfriend, Karine Amelya de Andrade dos Santos at the time of his arrest..His alleged personal trainer, Rafael Abeid Topolosky, was also with them..Steynberg was apparently living with Dos Santos at the time. After allegedly presenting police with false identification, they escorted him back to the residence to conduct a search..Upon searching the home, police found the Edson Pereira de Almeida identity document, which used Steynberg's photograph..Steynberg's lawyers dispute this version of events and appear to be mounting a "fruit of the poisonous tree" defence in his appeal, claiming police unlawfully gathered the evidence against him..They also told the court there were no arrest warrants against Steynberg in South Africa or any other country, and no Interpol notice at the time of his arrest..Steynberg apparently disavowed any knowledge of actually using his fake IDs. However, he also said he bought them because his life was in danger in South Africa..Police disputed Steynberg's insinuations that he didn't use the Cleisson identity for fraud, saying he used it to reserve flights for Dos Santos and her mother..Their investigation also revealed that Steynberg had used the name "Cleisson" to open an account with Club Swan..Club Swan describes itself as a "lifestyle and payments platform for digital currency enthusiasts.".Read more: SA home to 2020's biggest crypto scandal – US investigators get involved.Living the high life.According to the court papers, police found that Steynberg maintained a lavish lifestyle, including using a helicopter for leisure transportation..They said the negotiation for the aircraft was done under the name Cleisson..Police testified that Steynberg used his Cleisson Veira da Silveira identity to move large amounts of money through a cryptocurrency broker..At the same time, his first girlfriend, Adriele Alencar, was arranging the purchase of property on his behalf..Steynberg's current girlfriend, Karine Amelya dos Santos, told police her family was experiencing financial hardship and helped him carry out a real estate transaction days before the arrest..Police said they reviewed text messages on Steynberg's confiscated iPhone and found he kept in touch with several individuals for whom he managed cryptocurrency investments, conducting transactions on their behalf..Police also identified his fake ID supplier as a man who goes by "Rodrigo"..In addition to forging identity documents, police testify that Steynberg asked Rodrigo for false vaccination certificates..Rodrigo also apparently offered to supply cocaine, which Steynberg accepted. Police reported that Rodrigo sent Steynberg a picture of the product, describing it as "pure"..Commuted sentence.In his verdict, the judge found Steynberg guilty of using forged documents with aggravating circumstances and sentenced him to three years and six months in prison..He was also sentenced to a fine equivalent to 120 days' wages. The fine is calculated using Brazil's minimum wage at the time of his arrest, which was 1,100 reais (R4,250) per month..This makes Steynberg's total criminal fine nearly R510,000 (South African rand)..However, the Brazilian penal code states that jail sentences under four years for non-violent crimes may be converted into fines..The judge commuted Steynberg's prison time to a charitable donation of twenty months' wages, or roughly R85,000..Based on publicly available information in Steynberg's extradition case, he remains in custody pending an outcome despite his commuted sentence..MyBroadband contacted Dos Santos, Topolosky, and Club Swan for comment. They did not respond by publication. Alencar could not be reached for comment. Steynberg and his advocates did not respond to requests for comment..Read also:.Bitcoin's rollercoaster ride: SEC lawsuits rattle crypto exchanges, but history hints at potential gains aheadJaltech's quarterly cryptocurrency market updateCryptocurrencies rebound following 2022's $2trn loss

Bitcoin scam CEO’s guilty verdict: Forged IDs, lavish lifestyle, and legal battles unveiled

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