Fraud committed by Raniere and Clare Bronfman

• Sex-slavery in the NXIVM cult’s subgroup, DOS, is just the tip of  iceberg of crimes committed by NXIVM, Seagram’s heiress Clare Bronfman and the cult’s minions.
• Wire fraud, tax crimes, and multi-object schemes to defraud violations committed, according to sources.

Federal prosecutors in Brooklyn allege that Allison Mack was paid money and “other benefits” to recruit attractive women for NXIVM leader, Keith Raniere. The question now is, where did Raniere find funds to pay Mack?

The answer is Seagram’s heiress, Clare Bronfman.

Federal authorities allege that Bronfman is Raniere’s chief financial backer, spending millions on Raniere.

After publication of the New York Times October 17, 2017 story that brought widespread attention to the sex-cult, Raniere and Bronfman fled to Mexico, where Raniere was arrested last month.

Following Mack’s arrest last Friday, sources report Bronfman is now acting slave-master.

Bronfman and Raniere committed tax and scheme-to-defraud crimes

Authorities allege that despite Bronfman lavishing millions on him, Raniere claims to be a “renunciate.” According to ex-girlfriend, Barbara Bouchey, Raniere advised followers not to pay taxes.

Various members took that advice to heart as evidenced by their tax liens.

Raniere and Bronfman brought lawsuits and filed criminal complaints against Bouchey. They did not succeed against her but were able to cause her financial damages and personal stress.

Bouchey could provide leads for prosecutors interested in tax conspiracy crimes.

Bronfman’s funding may have been done with intent to help Raniere evade income taxes, and assist in widespread tax conspiracy.

Aside from potential tax violations, if Bronfman gave Raniere funds to pay Mack and others to recruit sex slaves, after obtaining coercive collateral, Bronfman should be added to the conspiracy to commit sex trafficking in the Raniere-Mack indictment.

It would stretch credulity to argue Bronfman was in the dark about DOS. Bronfman is a hands-on operator, and board member of Nxivm. She has known Raniere since 2002 and “invested” millions into him and the cult.

She flew away to Mexico with him shortly after mainstream media broke the news of the cult’s branding and other practices. The investigation will probably show prosecutors that Bronfman financed the sex-slavery in DOS.

Additionally, prosecutors are likely examining the NXIVM pyramid scheme for wire fraud and conspiracy violations, unrelated to DOS branding and slavery.

Raniere’s history of pyramid schemes dates back to the 1990s with Consumers’ Buyline -shut down by NY Attorney General – with Raniere paying a fine].

A consumer complaint with the NY State Department of Consumer Protection was filed last year, alleging NXIVM is a “cult preying on vulnerable women and men who are looking for a credible self help program.”

Complaints against NXIVM in recent years have been somewhat rare. Given that Bronfman uses her trust fund money to crush ex-slaves, cult defectors, Raniere’s ex girlfriends, and especially any critics, it is not surprising that few dare to openly complain.

To the extent the sales pitch of the cult promised value predicated on Raniere being the world’s smartest man, where prosecutors have discovered he graduated from the Rensselaer Polytechnic Institute with a 2.26 GPA (failing or barely passing his upper level math and science courses), the federal prosecutors have already established the first element of deceit.

The steep costs of tuition for NXIVM classes and other benefits were one object of the Raniere/Bronfman scheme (aside from satisfying Raniere’s sexual proclivities and sadistic desires, such as directing a slave to run headfirst into a tree and another to drink from a puddle).

In making out the scheme to defraud, as to the necessary ‘intent to harm,’ it was part of the objective to obtain forced labor and sex from many women. Raniere and Bronfman accomplished this through steep fees that bankrupted members. Those members had to “work off” the debt, and stay within the cult’s good graces under two different and sometimes overlapping scenarios:

(1) they were brainwashed and addicted to their programmed cult lifestyle.

(2) they knew too much and feared leaving due to Bronfman’s willingness to bankroll attorneys and using the court system to sue ex-members into bankruptcy or prison.

The intent to harm was manifested by the desire of Raniere and Bronfman to obtain forced labor, sex, and reduce members to that state of dependence that made them susceptible to forced labor.

After having softened their brains through years of brainwashing, Raniere’s advice to members to ‘blow off taxes,’ and other ill-advised, illegal lifestyle choices, suggests a pattern of intending to harm those under his tutelage and command, as he knew that advice and mentorship was harmful when he gave it.

‘He who has the most joy wins’; a long pattern of scheming to defraud

One final aspect of Bronfman/Raniere fraudulent scheming, somewhat less talked about, is their pattern of engaging independent contractors and consultants then terminating under pretext, and demanding return of any money paid out, refusing to pay them what they owe, or suing them via a complex and expensive-to-defend lawsuits.

A case in point is that of U.S. Senator Kristin Gilllibrand’s father, Doug Rutnik. He was retained as a consultant and legal adviser by NXIVM in 2004, at the rate of $25,000 per month. He was hired to help them resolve an array of legal and political problems hampering NXIVM’s operations – or so he thought. One of those problems concerned a long-overdue payment Raniere owed to the New York State Attorney General arising from his closed-down Consumers’ Buyline operation.

Rutnik’s main contact person was Nancy Salzman (Salzman is the putative president of Executive Success Programs. Her house was raided by the FBI last month. While Raniere is known as “Vanguard,” she is known as “Prefect.”)

After four months, Rutnik quit, having been informed of possible illegal activities NXIVM and Raniere were involved in.  But Raniere decreed that Rutnik could not quit. So, he directed the company to sue Rutnik and, as an additional threatening gesture, NXIVM reared false allegations of ‘sexual harassment’ against Rutnik claiming he had inappropriate behavior toward, of all people, Nancy Salzman.

The lie was despicable, but Rutnik had enough. He settled by returning every dollar paid to him – $100,000.

In short, Rutnik ended up receiving no payment for services he provided NXIVM. He was defrauded, and, in an irony of ironies, was accused of sexual harassment by a sex-slave cult.

Then there is the case of Frank Parlato, who first broke the story of Raniere’s human branding practices. Parlato met the Bronfmans in 2007, and was initially engaged to do public relations work for NXIVM, to help rehabilitate their public image which became tainted after Forbes published an article in 2003 where the group was dubbed a “cult.”

Parlato states that, from what he saw on the surface, between Raniere, Bronfman, Salzman and others with whom he had contact, everything seemed legal.

“There was no inkling to me that it was a sinister cult that abused women and critics. They seemed a bit quirky, that’s all,” Parlato said.

After a few months in Albany working for Bronfmans, Parlato discovered that a Bronfman real estate venture had lost over $26 million in Los Angeles and the properties were not even in their names. Parlato advised the Bronfmans he could secure title to their properties. Parlato and his attorney proposed an advance of $1 million, and 1/3 of profits of the venture. Bronfman and Raniere agreed, the deal was struck, and Parlato recovered title to the properties for the Bronfmans.

Then, almost immediately after, in characteristic Bronfman/Raniere-fashion, with no apparently legitimate reason, they terminated Parlato, and demanded the $1 million advance be returned. Parlato refused and held the money in escrow pending resolution of the dispute.

The Bronfmans did not immediately sue Parlato, but decided to use him in the civil suit regarding the Los Angeles properties, with Bronfman testifying in open court that Parlato did them a lot of good, and that his $1 million advance, “compared to 26.43 [million Parlato recovered for Bronfmans] it was worth it to us.” 

As soon as Bronfmans won the civil case against the Russian contractor, they pursued a civil and criminal complaint against Parlato, in 2011, securing an indictment against him in 2015, where the Western District of New York federal authorities alleged that, among other things, Parlato  defrauded the Bronfmans.

While that case is ongoing and has not yet been dismissed – which is what happens with most Bronfman-caused criminal cases – court records suggest Clare Bronfman perjured herself to assist in the indictment, and that her attorney, William Savino, and infamous retired Assistant United States Attorney, Anthony M. Bruce, suborned perjury. Prosecutors in the Western District of New York are still pursuing the Bronfman-led criminal case against Parlato.

Bronfman/Raniere/NXIVM’s long history is replete with examples of defrauded victims, such as Bouchey who lost her life-savings on a loan to Raniere, who, rather than return the money, initiated years of lawsuits against her.

Allison Mack is a victim of the cult’s nefarious schemes – with Mack, once a wealthy and successful actress who become impoverished through debt to the cult, and reduced to working it off through pimping women, among other things.

Some have questioned why Bronfman, who has hundreds of millions at her disposal, would engage in lawsuits, spending millions in attorneys’ fees over the years over comparatively trifling sums. The answer may lie in the meaning of Raniere’s devious philosophy, that “he who has the most joy wins.”

Inside, ex-members report that suing and putting people in jail gives Raniere and Bronfman “ethical joy.”

Bronfman, as the beneficiary of a multi-million dollar trust, did not need the money that she has spent destroying Raniere’s enemies. Then again, her “investments” in Raniere and the cult over the years have not yielded any increase in income, but reportedly resulted in large losses (One former consultant and long-time critic has estimated that Clare and her sister, Sara Bronfman Igtet, have jointly spent more than $200-million in support of Raniere and his various schemes and lawsuits).

Sources say tax evasion is not her goal: it’s the thrill of scheming (what she and Raniere call “ethics“) and punishing people that bring her and Raniere “joy.”

Frank Parlato