The Rise and Fall of South Africa’s Largest Ponzi Schemes
Over the last few years, South Africa has witnessed the collapse of three significant Ponzi schemes — MTI, BHI Trust, and the Diamond Scheme — resulting in investors losing millions of rands. Ponzi schemes, which promise high returns with little risk, rely on attracting new investors to pay returns to earlier investors. These schemes are unsustainable by design, ultimately collapsing when they can no longer recruit new members.
MTI: Johann Steynberg’s Bitcoin Ponzi Scheme
One of the largest Ponzi schemes in South Africa’s history was Mirror Trading International (MTI), led by Johann Steynberg. MTI lured investors with promises of high returns on Bitcoin investments. The scheme operated on a multi-level marketing structure, encouraging participants to recruit new members in exchange for bonuses.
The scheme began unraveling in September 2020 after a group called Anonymous ZA revealed the fraudulent structure behind MTI’s website. Steynberg fled to Brazil, where he was later arrested for using a false identity. He faced charges for defrauding thousands of investors of Bitcoin, with losses estimated at around 23,000 BTC, worth billions in rands. Although Steynberg reportedly died while under house arrest in 2023, his legacy continues to haunt the global financial landscape.
BHI Trust: Craig Warriner’s Deceptive Scheme
Another major Ponzi scheme was the BHI Trust, led by Craig Warriner, who deceived wealthy investors by promising consistent daily profits from trading stocks like BHP Billiton and Anglo American. Warriner used his elite connections, including alumni from St Stithians, to attract investors.
The scheme collapsed in late 2023, leading to Warriner’s arrest. He was later sentenced to 25 years in prison after pleading guilty to fraud, corruption, and violating financial regulations. Initial reports suggested that around 206 investors were affected, but further investigations indicated that over 800 victims may have been involved, with losses potentially exceeding R3 billion.
The Financial Sector Conduct Authority (FSCA) banned Warriner from providing financial services, and the investigation continues as liquidators work to recover assets. However, tracing funds over a period of 15 years has proven to be a complex and slow process.
The Diamond Scheme: Louis Liebenberg and Tariomix
The Diamond Scheme, orchestrated by Louis Liebenberg and his company Tariomix, operated under the guise of a legitimate diamond investment venture. Through his brand Forever Diamonds and Gold, Liebenberg solicited investments for buying and selling polished diamonds. However, it was soon revealed that Tariomix was likely a Ponzi scheme, scamming investors out of more than R4 billion since 2019.
In 2023, Tariomix was provisionally liquidated, and Liebenberg’s accounts were frozen after suspicious activities were detected. Liebenberg, alongside his wife and accomplices, was arrested after an investigation by the Hawks. Despite his legal troubles and association with former President Jacob Zuma, Liebenberg’s criminal activities have further tarnished his reputation.
Conclusion: The Lasting Impact of Ponzi Schemes in South Africa
South Africa has witnessed a troubling rise in Ponzi schemes, and these three high-profile cases — MTI, BHI Trust, and the Diamond Scheme — highlight the dangers of fraudulent investment schemes. These scams prey on the desire for high returns, often exploiting trust and relationships to lure victims into the trap.
As the FSCA continues to investigate these schemes and strengthen regulations, the lessons from these frauds remain clear: always verify investment opportunities, and be wary of promises that sound too good to be true.