What really happened at Allison Mack’s arraignment — When she was first denied bail

The US v. Allison Mack

On Monday, April 23rd , Allison Mack was able to arrange $5 million bail and was released on home arrest at her parent’s home in California.

But at her arraignment, on the day of her arrest – Friday, April 20th – she was denied release. That’s why she spent the weekend in jail.

At that April 20^th  hearing, the public learned that Allison was indeed married to Nicki Clyne [as first reported by Frank Report/Artvoice], that her income was about $80,000 per year [down from millions before she started her ‘Executive Success Programs’ training with the NXIVM sex-slaver cult], and, most significantly, that Allison Mack, through her attorneys, agreed to enter into plea negotiations.

Mack appeared before US Magistrate Judge Cheryl L. Pollak.

Appearing for the prosecution was Moira Kim Penza and Tanya Hajjar, both Assistant United States Attorneys in the Eastern District of New York.

Mack’s attorneys were Sean Buckley and William McGovern of Kobre & Kim, LLP of NYC.

The following is from the transcript:

Proceedings commenced at 4:27 pm.

THE COURT [addressing Mack]: All right. You’re here today because the grand jury has returned an indictment charging you with three counts. The first count charges you with knowingly and intentionally recruiting, enticing, harboring, transporting, providing, obtained advertising, maintaining, patronizing and soliciting one or more persons, specifically Jane Doe’s 1 and 2, individuals whose identities are known to the grand jury, in and affecting interstate commerce and attempting to do the same, and benefiting and attempting to benefit financially and by receiving a thing of value from participation in a venture which had engaged in such acts knowing that means of force, threats of force, fraud and coercion and a combination of such means would be used to cause these people to engage in one or more commercial sex acts.

The second count charges you with a conspiracy to engage in sex trafficking, and the third count charges you with conspiring to commit forced labor. Do you understand what the charges are?

THE DEFENDANT: Yes.

THE COURT: Okay. Counsel, have you reviewed the charges with your client and advised her of her rights?

BUCKLEY: Yes, we have, Your Honor. We’ve reviewed them briefly with her in the cell block.

***

THE COURT: And is she prepared to enter a plea this afternoon?

BUCKLEY: Yes, she enters a plea of not guilty.

***

THE COURT: All right. Do we have a date for Ms. Mack to appear before Judge Garaufis in this case?

PENZA: Yes, Your Honor. The initial appearance before Judge Garaufis will be May 3rd at 10:30 a.m.

[Ed. Note: subsequently changed to May 4th at 10:30 am.]

THE COURT: Okay. All right. So now we need to deal with the issue of bail or detention. What’s the government’s position with respect to bail for Ms. Mack?

PENZA: Your Honor, the government’s position is that the defendant poses a danger to the community and a risk of flight, but the government’s position is that a substantial bail package, commensurate with the defendant’s access to funds, would be sufficient to mitigate the risk to the community, including intimidation of witnesses and the risk of non-appearance.

***

PENZA: Based on the charges alone, which are detailed in the letter we filed with the court, Ms. Mack was one of the top members of a highly organized scheme which was designed to provide sex to her co-defendant {Keith Raniere] – who, I will add, Your Honor, is currently incarcerated at the MDC – for her own benefit and for her own status with the defendant.

Under the guise of female empowerment, Your Honor, she starved women until they fit her co-defendant’s sexual ideal, and she targeted vulnerable women in order to do that. There’s also, Your Honor, a true risk of danger here in the form of witness intimidation. She has, based on the structure, a number of what have been termed here slaves underneath her, who have pledged vows of obedience and who literally have collateral [Ed note: ‘Collateral’ is blackmail worthy material]. She literally has collateral on a number of the people who we view to either be victims or potential witnesses in this case. And she obviously has an ability to manipulate people and to coerce them, based on the charges here.

In addition, Your Honor, we submit that the defendant is a risk of flight. She is facing a 15 -year mandatory minimum charge.  She has a lack of ties to the Eastern District. She has apparent access to enormous personal wealth beyond what we understand her to currently have access to, based on what Pretrial has reported. At the time when her co-defendant was arrested, she was present. It was a villa that was costing $10,000 a week.  She has access to high-ranking members of NXIVM, who have enormous personal wealth themselves [Ed. note: That last reference is to Clare and Sara Bronfman, Seagram’s heiresses].

And, in addition, at this point, we understand that there’s a significant legal retainer and the government, thus far, has not been provided with information as to how that legal retainer is being paid. So, given those concerns, Your Honor, at this point we have not been presented with a potential bail package from the defendant.

***

THE COURT: All right. …  [W]e have Pretrial Services officers here. Can you give us a report based on your interview?

MOORE: Sure. My name is Ramon Moore. I spoke to the defendant and she advised that … she’s 35 years old and she was born in Preetz, Germany, to the union of Mindy and John Mack. She relocated to the United States at two years old and had resided in California with her parents for 16 years and relocated to Vancouver, Canada for ten years, and lived there alone. She just moved back to New York. …. She moved back to New York and she has been living in New York since December of 2017 at an apartment with her wife, who is Nicole Clyne.

She stated that she has two siblings who both reside in California. She stated that she has been married to Ms. Clyne since February of 2017 and that she’s [Ed. note: Clyne] a green card holder.  She stated that Ms. Clyne is a self-employed writer. Her income is contingent upon the projects that she receives but makes approximately a thousand to $2,500 a month. She stated that she has no children.

The highest level of education she’s received is a high school diploma from Los Alamedas High School in Los Alamedas, California. She stated that she is employed as an actress. She stated that she receives approximately $70,000 in residual payments from the Smallville season, and she signs autographs on the weekend twice per year and receives about $10,000 from that.

She stated that she also owns a residence in Clifton Park, New York that’s valued at $220,000, that she rents out and receives $500 a month for. She stated that she’s also a part-time actress. She teaches acting skills part time. She’s been doing that since 2016 and she makes approximately $100 a hour.

She stated that she has two bank accounts and a profit sharing plan. …  the only asset that she has is the house located in Clifton Park. She stated that she has no physical or mental health issues, as well as no substance abuse history.  And she stated that if she’s released, she can continue to reside at her apartment in Brooklyn, New York. Also, she has a passport that was seized by the FBI this morning. She stated that she traveled to Mexico for three weeks in March of 2018 and over the last five years, she’s traveled regularly to Europe for business and leisure. And that’s about it.

***

THE COURT: All right. Counsel?

BUCKLEY: Yes, Your Honor. If I may, just briefly I’ll start with the second point the government made first, which is this client does not pose any risk of flight. Just a couple of facts that I would like the court to be aware of. The first is when Mr. Raniere, the co-defendant, was arrested in Mexico, Ms. Mack was also in Mexico at the time. She was aware of the investigation. She was aware of the possibility that she, too, may be charged. And in spite of that, she returned to the United States. But not only did she return to the United States, Your Honor, once she retained us as counsel, she authorized us to reach out to the United States Attorney’s Office to inform them that we had been retained. We affirmatively reached out. And then we contacted the U.S. Attorney’s Office two days prior to her anticipated return to the United States to try to find out whether she was going to be arrested and that this would be a surrender, or whether she was going to be permitted to return of her own accord. We were provided no assurances of that.  Notwithstanding the lack of assurances, Ms. Mack still returned to the United States on two days’ notice to the government.

She resides here in the Eastern District of New York. She resides at a residence located not far from here and indeed when she was arrested earlier today, they arrested her at that residence

[Ed. note: her residence was 111 Hicks, Brooklyn Heights].

Those facts, Judge, we think strongly undercut any argument here that this defendant poses a risk of flight.  But those aren’t the only facts for the court to consider. Ms. Mack has substantial ties to the United States. She is a U.S. citizen. Her parents live here in the United States. She has other family who reside in the United States. She owns property in the Northern District of New York. She rents her property here in the Eastern District.  All of her finances and assets are located here in the United States. She doesn’t possess any foreign properties or assets and her professional career is here.

…  As I noted, she returned voluntarily with no assurances about whether she would be arrested or not with knowledge that this investigation has been launched and with knowledge of the charges that were levied against Mr. Raniere.

The government in its submission points to the strength of its case. I’m not going to belabor it, Judge, given that it’s a Friday afternoon, but the allegations contained in the indictment are only that. They are allegations. The hard facts establish that Ms. Mack is not a risk of flight. To the extent there is concern about her prior travel, that concern is readily ameliorated by the surrender of her passport and an agreement by Ms. Mack that she will not apply or seek new documents.

And even were she to leave, she’s a U.S. citizen, Judge. A red notice would follow her and subject her to arrest anywhere in the world and return here…. The only argument advanced by the government about the need for detention is a speculative argument that she may threaten others or try to tamper with witnesses.

***

THE COURT: All right. What’s the government’s view here?

PENZA: Your Honor, the government’s position is that a personal recognizance bond in a case involving a 15 -year mandatory minimum sentence is wholly inappropriate….

Moreover, at the time when she did fly into the country, at that time she had no phone on her and no computer on her, which we — the government submits has been a pattern of members of the NXIVM community coming into the country without those devices to avoid law enforcement seizing those.

***

THE COURT: … You indicated, I believe, in the initial argument that you thought she had substantial assets. They’re telling me that all she owns is this $200,000 property in Clifton [Park], New York, and she makes very little in terms of salary, from I guess the residuals from her acting job previously, and some current acting teaching that she does. So I’m a little confused as to what exactly is the status of her resources here.

PENZA: … [T]he government does not have a fair picture right now of her access to funds.  The very fact of Kobre & Kim’s being retained alone indicated that there was a very high retainer. We understand that there is a high retainer and our concern is that that means there are NXIVM contacts, these high net worth individuals that we’ve talked about who are providing Ms. Mack with funds and whom she would have access to funds from. So, that’s why in terms of determining an appropriate package, we need to flesh that out, Your Honor.

BUCKLEY: If I may, Your Honor. It’s an absurd argument that we’re taking funds from people related to NXIVM. The government has no real right to inquire into the source of our funds at this stage, but — nor how much she’s retained Kobre & Kim for. I think that argument is, frankly, ridiculous.

***

THE COURT: Well, I considered – the government’s argument and I considered defendant’s arguments as well.  Honestly, … given the nature of the charges, the 15 -year mandatory minimum, a personal recognizance bond not secured by anything other than the defendant’s own signature is not, in my view, sufficient.… I am not going to release her this evening on her own signature… The government’s allegations in this case involve a far reaching conspiracy and… these are serious charges.  And while you’ve made an impassioned plea that she is not a risk of flight, I respectfully disagree. She may not have realized that she was looking at 15 years in jail….  If you would like to come back … with a more put together package, with suretors and property… then that’s fine….

BUCKLEY: … Just to clarify two points though. One, we are prepared to post both the property in Albany and her [parents] are prepared to post her childhood home in California, which they also own.

THE COURT: … before I’m going to release anybody on that, I need to see the mortgage, I need to see the deeds. I need to see the suretors. And I don’t have any of that today…. So I’m telling you I’m not going to release her tonight, but you certainly can come back whenever you feel you’re ready to do that.

***

THE COURT: Okay. Is there anything else this evening?

PENZA: Your Honor, Judge Garaufis has given us permission to seek an order of excludable delay. The government intends before the next status conference to begin the process of producing discovery and we also would entertain any initial plea negotiations that the defendant would like to have. So in light of that, we would ask that time be excluded until the May 3rd conference.

THE COURT: Counsel, is that what your client wishes to do?

BUCKLEY: We have no objection, Your Honor.

THE COURT: Okay. Have you discussed it with Ms. Mack?

BUCKLEY: We did. Yes, Your Honor.

THE COURT: You’ve explained it.

BUCKLEY: Yes, Your Honor.

THE COURT: So Ms. Mack, I want to make sure you understand what we’re talking about. Under the Constitution and the laws of the United States you’re entitled to a speedy and public trial by jury commencing within 70 days of the filing of the indictment…. If the government fails to bring you to trial within that requisite time period, that could later be the basis for you to move to dismiss the charges against you. What the government has indicated to me is they would like me to exclude the time from today until —

PENZA: May 3rd, Your Honor.

THE COURT: — May 3rd, when you’ll see the district judge on this case, because during that period of time, the government’s going to be providing your attorneys with the evidence that they have collected regarding the charges here, and your attorneys and the government are going to have a conversation to see if the case can be resolved without the need for a trial. And it’s difficult to both engage in plea negotiations and also prepare for trial at the same time. Do you understand all of that? Speak up.

THE DEFENDANT: Yes.

THE COURT: Okay. Have you discussed this with your attorneys?

THE DEFENDANT: Yes.

THE COURT: Okay. Do you wish me to enter this order of excludable delay while these plea discussions go forward?

THE DEFENDANT: Yes.

***

THE COURT: All right. I’m going to approve the order to excludable delay finding that it is in the best interest of both the public and the defendant while plea negotiations continue. All right. Anything else?

PENZA: Not from the government, Your Honor.

BUCKLEY: No, Your Honor.

(Proceedings concluded at 4:52 p.m, some 25 minutes after they commenced.)

Frank Parlato