South Africa attempting to regulate MLM Ponzi schemes through a broken liquidation system is one of the dumbest things I’ve ever had to report on.

In the latest show of stunning incompetence, South Africa’s Revenue Service, the country’s tax regulator, is looking to steal the entire balance of recovered funds.

In between not fining Mirror Trading International scammers and continuing to let suspect MTI owners Clynton and Cheri Marks sit on hundreds of millions in stolen funds, the SA govt found time to send MTI’s liquidators a tax bill for R580,441,463.28 ($34.46 million USD).

As Jan Vermeulen from MyBroadband points out;

If collected, the tax would consume nearly all of the money the scheme’s liquidators have recovered to date.

And if you’re thinking surely this can be disputed as we’ve seen with Receiverships in the US, you’d be wrong.

The funds in question were seized as part of civil liquidation proceedings, initiated as a result of Mirror Trading International collapsing. In other words South African authorities had nothing to do with it.

As opposed to the reluctance to regulate MTI or arrest anyone involved, the South African government is lethally efficient at capitalizing on other’s efforts.

SARS said in a letter to the liquidators that they must pay the full amount immediately and may dispute it later.

SARS warned that objections and appeals do not suspend the collectability of the amounts and that it would continue to charge interest.

Right. And arguing with SARS that seized Ponzi funds should go to victims instead of government coffers is what, another five or ten years in court?

After failing to hold anyone accountable or the Marks’ last Ponzi, BTC Global, and then letting Mirror Trading International balloon to $1.8 billion, it was left to Brazilian authorities to arrest Johann Steynberg after the fact.

Steynberg, who worked with the Marks to run MTI, is facing extradition to South Africa. Details of pending criminal charges have not been made public.

Honestly I’m not expecting much. The South African government is looking to seize what has been recovered from MTI, and otherwise sweep the $1.8 billion Ponzi under the rug.

The Marks crime family will be permitted to keep the hundreds of millions they stole, “Johann Steynberg mysteriously disappears following extradition to South Africa”, and that’ll be that.

I find myself in the odd position of rallying against government regulators. Normally I’m explaining to victims of Ponzi schemes how letting justice play out is in there best interests.

With Mirror Trading International and South Africa though there is no justice. Known local perpetrators are protected and, for over two years now, victims have and continue to be failed by a broken regulatory system.