Judge denies NXIVM founder Raniere's second request for bond

Government questions Bronfman's bankrolling of co-defendants legal expenses

Albany Times-Union/December 6, 2018

By Brendan J. Lyons

A federal judge has rejected NXIVM founder Keith Raniere's latest request to be released on $1 million bond while his criminal case is pending.

The order, handed down this week by U.S. District Judge Nicholas A. Garaufis, cited Raniere's continued flight risk, noting again that he had traveled to Mexico in the fall of 2017 when a federal investigation of his organization was intensifying.

In rejecting Raniere's second request for bond, the judge also cast aside the defense argument that he would not run away because it would damage his reputation.

"(Raniere) submits that, if he fled, he would risk losing the love and respect of his friends — in particular, the love and respect of his sureties, who would lose the money they had posted for bail," the judge wrote. "Considering the charges Raniere faces, the potential loss of love and respect is an unavailing substitute for a financial stake in his appearance."

Raniere, 58, could serve up to life in prison on the sex-trafficking charges he faces, and potentially decades in prison if convicted on charges of wire fraud, racketeering and forced-labor conspiracy.

He had proposed his $1 million bond would be secured by three properties owned by others, but the government said the value of those properties, owned by NXIVM clients, is only about $170,000.

During a court proceeding in the case on Thursday in Brooklyn, the judge questioned the defense team about the government's concerns that a trust fund set up earlier this year by Clare Bronfman, NXIVM's longtime operations director and an heiress of the Seagram's liquor fortune, was being used to pay the legal costs for Raniere and his five co-defendants, including Bronfman herself.

Raniere's attorney, Marc Agnifilo, wrote a letter to the court on Wednesday saying the government's concerns that the trust fund might unduly influence Raniere or his co-defendants to fight the charges is misplaced.

"The truth is that government files this ... motion now, six months after being told about the trust, because of its vexation over the fact that none of the defendants have pleaded guilty and wish to blame this on divided loyalties," Agnifilo wrote. "The government, however, conveniently ignores the most obvious reason for defendants pleading not guilty. That is, of course, because the defendants are not guilty."

But the government noted that Bronfman was indicted as a co-conspirator in July, changing the circumstances of her financial support for the other defendants in the case.

"The government has learned that the legal fees of multiple witnesses and potential witnesses are also being paid by Bronfman or the trust, and that there have been efforts to pay the legal fees of other witnesses," the U.S. attorney's office wrote in a letter to the judge on Nov. 30.

The government also raised concerns that a female witness who had been subpoenaed to testify before a grand jury in the case told them that an attorney she had been directed to, and who was being paid by Bronfman, had said "he would not continue to represent her, and by extension, her legal fees would not be paid, if she did not invoke the Fifth Amendment and decline to answer questions."

"If similar conditions are being placed on Bronfman's co-defendants, expressly or otherwise, the advice provided by their counsel might be similarly affected," the government wrote.

The judge asked defense attorneys for more information about the trust fund arrangement, but did not issue a ruling on the matter Thursday.

Raniere's other co-defendants in the case are actress Allison Mack, NXIVM's president Nancy Salzman, her daughter Lauren Salzman, and Kathy Russell, a longtime NXIVM bookkeeper.

Raniere, whose organization has been described by at least one expert as a cult, was taken into custody in late March at a luxury beach villa in Puerto Vallarta, Mexico, along the Pacific Ocean. He was deported to the United States and arrested on criminal charges.

In Mexico, authorities said, Raniere got rid of his mobile phone and used encrypted email to communicate with his followers. They said it took Mexican authorities nearly two months to locate and detain him.

Raniere and Mack were indicted in April on charges of sex trafficking and forced labor conspiracy.
On July 25, the criminal case expanded under a superseding indictment that elevated the charges against Raniere and Mack, and added as defendants Bronfman, Russell and Nancy and Lauren Salzman.

The new indictment charged the six defendants with crimes that include identity theft, harboring of aliens for financial gain, forced labor, sex trafficking and wire fraud.

Raniere is being held at the Metropolitan Detention Center in Brooklyn while the case is pending. The other defendants have been released on bond and conditions that include home confinement.

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