Clynton Marks and his wife Cheri are on the verge of losing two multimillion-rand properties they bought from the proceeds of what has been described as SA’s biggest bitcoin Ponzi scheme, which saw clients across the world lose more than R3bn.
Marks, a 50% shareholder in Mirror Trading International (MTI), went to great lengths to hide the source of funds he used to buy two properties for cash, using the company’s ill-gotten money, its business rescue practitioners told the Durban high court.
They are applying for the liquidation of an entity called Uprobuzz, a company the rescue practitioners believe was a shell used solely to acquire properties for the benefit of Marks and his wife.
Uprobuzz has one director, a man called Don Nkomo, an associate of the Marks family. Despite the Marks’ saying publicly that the properties belong to Nkomo, evidence in the possession of the business rescue experts shows Nkomo is not the true owner of the properties that are worth more than R20m.
The first property, a mansion in Durban, was bought for R11.5m in three tranches in June 2020.
Despite their denials, evidence produced by the investigators shows bitcoin cashed in from MTI was used for the purchase and that Cheri, using her maiden name Grey, signed the purchase agreement.
The second property, in Mpumalanga, was bought three months after the Durban one for R9.5m, also paid for in cash.
Text messages between Marks and one of his associates show he is the one who made the payments. Both properties are registered in Uprobuzz, which the business rescue practitioners refer to as Marks’ “alter ego”.
“Uprobuzz was merely the alter ego of Marks and he funded the acquisition of the two immovable properties ... with the fruits from a rotten tree, being the illegal scheme run through MTI. The respondent is not a trading company. It was registered and merely exists to hold properties for the Marks family, which they acquired in the dubious manner set out above,” the liquidation application reads.
Paper trail
The paper trail also shows large amounts of money were paid to Marks’ mother-in-law and Nkomo’s wife.
The business rescue experts also said Marks cannot escape taking responsibility for the fraud perpetrated against MTI’s customers.
The business rescue practitioners said when MTI went into provisional liquidation in December 2020, it had a shortfall of 6,900 bitcoin. They said if MTI had traded legitimately, the company was supposed to have 22,200 bitcoin with a value of about R12bn at current prices.
Marks’ investor profile shows he had just 22 bitcoin in MTI but had withdrawn 220 bitcoin valued at R74.9m against the investment by the time the company went into liquidation.
“Mr Marks was among the top three investors in the MTI investment scheme, and all of his so-called profit and returns accrued to him within the scheme from bitcoin subsequently invested by others, and his riches resulted to the detriment of others.”
When asked by Carte Blanche in 2020 who owned the Durban property they occupied, the Marks’ said the house belonged to Nkomo. “There is nothing sinister in residing in a home owned by a friend,” they said.
MTI was founded in 2019 by Marks and Johann Steynberg. Cheri worked for the company as its head of communications and marketing.
Steynberg, who was MTI’s CEO, was arrested in Brazil in December 2021. He had fled there a year earlier after the MTI scheme imploded and the authorities began circling the company.
Steynberg was in April hit with a US court order to pay $3.4bn made up of $1.7bn for restitution to thousands of victims and another $1.7bn as a civil penalty.
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