Affidavit of Stephanie Franco

United States District Court Northern District of New York

September 2, 2003

Civil Action No. 03CV0976

Hon. Thomas J. McAvoy, U.S.D.J

NXIVM Corporation, formerly known
as Executive Success Programs, Inc.
and First Principles, Inc., Plaintiffs

Vs.

The Cult Education Institute; Rick Ross; John Hochman;
And Stephanie Franco

September 2, 2003

State of New Jersey;

County of Morris;

I, Stephanie Franco, of full age, hereby swear, as follows:

1. I reside [in New Jersey]. I am a defendant in the above-referenced action. I have personal knowledge of the facts that are set forth herein and I submit this affidavit in opposition to the application of plaintiffs NXIVM Corporation, formerly known as Executive Success Programs, Inc. and First Principles, Inc. (collectively "ESP") to, among other things, prohibit me from speaking about ESP.

Overview

2. I have reviewed the papers submitted by ESP in support of their applications, including the Certifications of Nancy Salzman ("Salzman"), my brother Michael Sutton ("Michael") and my brother-in-law A.K. ("A").

3. These papers contain misstatements concerning my brief time spent with ESP, my subsequent realization that the group was attempting to control and manipulate me and my family members, and the efforts of my family and me to save my brother, Michael Sutton, from this group.

4. Contrary to the implication in ESP's moving papers, I did not know [Rick] Ross at the time that I attended an ESP seminar in or about late June 2001.

5. I first met Mr. Ross in late 2002 when my family was trying to help my brother, Michael Sutton. ESP's papers incorrectly state that I have the materials that obtained from ESP to [Rick] Ross. In fact, I shared the materials with my brother Jeffrey Sutton, during the course of a family intervention with Michael in the hopes that it would assist Jeffrey in trying to help our brother.

6. ESP's papers state that I have "conspired" with Dr. John Hochman of California. That is not true. I have never met or spoken to Dr. Hochman.

7. The statement in ESP's papers that I have utilized ESP's materials in an article that I published in Image magazine is untrue. The article that I wrote for Image, "Be Real," was published in the June 2003 edition, and did not concern or utilize any materials that I received from ESP. (I attach hereto as Exhibit A a true copy of the article in question from Image magazine.) Further, I note that I write for this publication free of charge and it is intended to be a service to my community. (I attach as Exhibit B the August 2003 Edition which includes my most recent article at page 146.)

8. I do not operate a Website and have never operated a Website.

9. I understand that ESP wants me to return the "Intensive" materials that I received. I do not want these materials and am willing to relinquish my copy.

10. I also understand that ESP wants to prevent me from commenting about my experience with the group. I do not believe that ESP should be able to prevent me from talking about my experiences should I choose to do so.

My Time Spent with ESP

11. In approximately January 2001, my brother Michael began telling me and the rest of my family about the ESP organization. He described the group as "fabulous." He told us that ESP's representatives were willing to have a private meeting for our entire family in New Jersey.

12. In winter 2000/2001, Nancy Salzman - who described herself as the President of ESP and insists upon the title, Prefect - came to the home of my brother-in-law Aaron in&New Jersey, at the invitation of Michael Sutton to tell A, Michael, my father and his wife, and me (and others) about ESP.

13. Thereafter, Michael continued to attend ESP seminars religiously. He stated, among other things, that ESP had changed his life. He encouraged me to attend a five-day training course called an "Intensive."

14. Based upon Michael's insistence, I agreed to attend an "Intensive" in Albany, New York that began on June 23, 2001. I incurred total costs in excess of $7,500 to attend.

15. Prior to attending, I signed an "application." At the outset of the "Intensive" in Albany, attendees were issued a Confidentiality Agreement in the form that is attached to A's affidavit as Exhibit B. I did not sign this Confidentiality Agreement. (I note that the form attached to A.K.'s affidavit does not contain my signature.)

16. I recall that on the first day I was there they told the attendees that the Townspeople thought ESP was a "cult," and that we were not to pay attention.

17. During the "Intensive," Ms. Salzman repeatedly told me how "special" I was and how they had "targeted" me to join ESP. In fact, Ms. Salzman took me out for a private dinner during my stay. ESP's coaches also told everyone who attended that ESP was their "real" family.

18. After the "Intensive," I was instructed to call Ms. Salzman's daughter, Lauren - my "coach" - every day at a designed time to discuss, among other things, recruitment efforts.

19. After this June 2001 16-day "Intensive," I attended a 5-day "Intensive" in Albany in August 2001. Also, I saw Ms. Salzman when she came to New Jersey to visit me and to promote ESP.

20. At approximately this time, I grew concerned about a number of rituals of ESP.

21. For instance, I was not comfortable with the fact that everyone in the group was required to bow down to Nancy Salzman (the "Prefect") and Keith Raniere (the "Vanguard") at the beginning and end of each meeting, as well as their insistence upon being addressed by their titles.

22. I also did not like that everyone in the group wore a scarf to identify their level within the group. People who were at the lowest level wore white scarves and were required to sit in the back of the room at lectures.

23. Also, people were strongly encouraged to bring in prospective recruits. I learned at about this time that one would receive a "commission" from ESP for every recruit brought in. For example, I learned that Michael received a commission for my attendance at the ESP "Intensive."

24. My concerns about ESP culminated when I left an "Intensive" in Albany and told Ms. Salzman that I could not come back for additional "Intensives" because my car had been recalled. Ms. Salzman told me that must come back and that I should take the train back to Albany. When I told her that could not, Ms. Salzman started berating me and told me that my "problems" were attributable to the fact that I did not honor my commitments. I have not spoken to Ms. Salzman since.

My Family Hired [Rick] Ross

25. My family was concerned that Michael was involved with a "cult." Unbeknownst to me, sometime in 2002, my family engaged Rick Ross to "deprogram" Michael. As I stated earlier, I did not know Rick Ross and had not had contact with him before this time.

26. I am told that in late 2002, Rick Ross and members of my family met with Michael Sutton in Florida to discuss his involvement with ESP. I did not attend the meeting.

27. Thereafter, Rick Ross met again with Michael Sutton and Jeffrey Sutton at the family house in New Jersey. I attended this meeting. After the meeting, my brother Jeffrey asked me if he could take a look at the materials that ESP had given me during the Intensive in June 2001. I gave my brother Jeffrey the materials.

28. After I was served with papers in this lawsuit, I asked Jeffrey to return the materials to me, which he did.