John P. Capitalist: What the Raniere superseding indictment might look like

By John P. Capitalist
Hi Frank;
You’ve republished two of my blog articles comparing Raniere/Nxivm to Scientology/Hubbard recently.
Feel free to publish the below if you wish.  If you do, please link prominently to my blog, http://www.reasoned.life, which has historically been about Scientology but is broadening to include thoughtful research on other cults and high-control groups.
Note that while I have to spend a lot of time assessing the impact and odds of success of litigation in my investment management career, I am not a lawyer.  I would thus defer to anyone who is who offers a well-reasoned counterargument to any of what follows.
It just occurred to me what they might be able to charge Raniere with in a superseding indictment.  Raniere’s financial disclosure filed when he first appeared in court claims that he’s indigent, with zero income and zero need to have filed taxes in decades.  He makes the bizarre claim that “when he needs a shirt, somehow it just appears.”  I would guess that the declaration of indigence is a sworn statement subject to the penalties for perjury, but I have not checked this.
As an aside, the assertion that stuff Raniere needs magically appears is an attempt to push responsibility for financial misdeeds onto his underlings, but I have to believe that a legal concept of “willful blindness” can come into play.  Wikipedia discusses here: https://en.wikipedia.org/wiki/Willful_blindness
My bet is that they go after him for either perjury or for income tax evasion, or both.  If he lived in facilities owned by some shell corporation that they can prove that he ultimately controlled, they can go after both Raniere personally and for any entities that were involved in improperly providing him financial benefit without reporting it.  That would ultimately lead to those organizations, likely including the main ESP and Nxivm entities, being shut down and assets seized for tax evasion.  Today, it’s much easier to pierce corporate veils in networks of shell companies than ever before, so even if some LLC that owns his love nest condo was directly involved, it is easy for the Feds to traverse the network of ownership to higher-level entities and take action against all of it.
While I am sure that Raniere thinks he has been extremely careful about putting various entities in others’ names, I suspect that the feds now have enough e-mail correspondence and text messages to show that actual control lay with Raniere and not Nancy Salzman and others.  He may have also slipped in setting up some of the minor shell corporations that owned various pieces of real estate that he used. Additionally, testimony from Nxians who have left in the wake of the abuse revelations could credibly establish that he was the sole beneficiary of properties listed as “retreat center,” “student housing” or whatever on the books.
As part of a tax fraud charge, if Raniere took the Bronfman’s money in the commodities trade and simply made it disappear while only claiming to have invested it, that’s certainly income, and on a scale that would make the IRS very interested in getting their hands on him.  They are up for a recovery of perhaps $20 million of the $65 million, if he just pocketed it without actually investing it in the market.  That’s worth going after, particularly if the FBI has managed to put together enough of a financial trail to understand where Raniere’s money now lives.
I would think it possible, though less likely, that they go after Raniere for money laundering at this time. Takes a while longer to prove that a cash stream is illicit — they may be able to seize bank deposits in cash on presumption of a crime under civil forfeiture laws, but it’s harder to prove that the cash moved in from Mexico is tied to criminal activity in Mexico.  The only reason for moving payments from ESP Mexico and Nxivm Mexico to the US in cash is to avoid US taxes.  That reinforces my point above about the likelihood of charges for tax evasion.
Could they add additional charges similar to the ones now on the table for sex trafficking and human slavery?  Yes, they certainly could, but I don’t think that’s a focus. Let’s say that they find another 50 examples of people brought in from Mexico for sex.  There’s still a good chance that, according to federal sentencing guidelines, that much of the sentence for the incremental convictions would run concurrently. If the EDNY wants to shut Raniere down permanently, they would probably want to find different classes of crimes where sentences would run consecutively.  Massive tax evasion on top of sex slavery ought to be enough to keep Raniere in jail for 30 years.
I suggest the likelihood of additional sex/slavery charges is lower than the odds of charging Raniere with other crimes because of the tendency of prosecutors to bring a manageable number of similar charges against a defendant, with the intent of maximizing deterrent effect by ensuring that each charge sticks in court. They don’t want to create the image that they throw 50 charges against a defendant and deal down to convictions on 3-4 of them because they don’t want other defendants to think that Uncle Sam is a pushover in deals.  And they don’t want to confuse a jury or arouse a jury’s sympathies on allegations of over-charging.
As an example, I’m intimately familiar with the case of hedge fund manager Raj Rajaratnam, who was convicted on only 8 counts of insider trading. When I started on Wall Street in the mid-1990s, Rajaratnam already had a reputation among those who knew him as pervasively dirty.  He didn’t just occasionally get inside information, he worked diligently to seek it out and use it on a large scale.  The FBI investigation turned up hundreds, if not thousands, of trades where there was some suspicion of impropriety.  But they only prosecuted 8 because that was enough to send Rajaratnam to jail for what could have been an effective death sentence (his health is poor and 11 years in prison has an excellent chance of killing him).
It’s possible that the Feds will pursue money laundering charges against mid-level or some high-level Nexians to get them to flip on Raniere.  But it’s entirely possible that they’d use money laundering to get Nancy Salzman and other top lieutenants, since they could conceivably raise the argument that they were under Raniere’s mental sway and they aren’t engaged in tax evasion since they received none of the benefits of the money that they allegedly moved. In that case, money laundering charges would be harder to claim duress for.  Every time you return to the US, the immigration form they hand out on the planes tells you that you need to declare cash over $10,000.  So you know you’re breaking the law. And if you do it multiple times, there’s an open and shut case of money laundering.  The “mental sway” argument could come into play during sentencing, but it won’t mitigate conduct that’s blatantly and obviously wrong based on information available to the defen

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  • “Massive tax evasion on top of sex slavery ought to be enough to keep Raniere in jail for 30 years.” That counts as life in prison. Woohoo!

  • Any ex-nxivms out there? Have you actually heard him play concert level piano? Or witnessed him showing judo moves? I am just curious if he has any real skills. As a poor piano player myself it’s still like riding a bike I could probably fool people with the few,songs I’m good at. Kristen Keefe said to a member that he was so fucking lazy this while she was still in.
    He had best start practicing some defensive moves because he’s going to need them until he becomes someone’s bitch in exchange for protection, he’s not some cute young thing so that could be a real painful process.

  • First off, let’s not forget the statement in first set of charges, one of the Jane Does clamins Raniere gave her 2,000 cash. Where did this cash come from?

    Makes one wonder who would just give someone 2,000 unless you knew you could replace the cash easily.

    Second, Raniere went to great lengths to sue Microsoft and ATT for infringement of his patients. His attorneys bills had to be over a couple of Million dollars. So where did that money come from?

    Raniere played volleyball every week. Everyone who went chipped in to pay for the gym rental. How did Raniere pay for his gym fees?

    Nancy Salzman bought Raniere a piano that cost about 80,000. She has got him exercise equipment that was about 25 – 30 thousand dollars. Tony Robbins took the same equipment with him when he traveled.

    He was also given money each year from students at his Vanguard Ego celebration. It was called his library fund. Ya, how many books did the Feds find in his sex den?

    His clothes didn’t “just appear”. Salzman and Clare Bronfman were well known for buying him clothes. How’d he get that fancy suit in the photos from his last interview?

    What about the cost of filing for all those patients? Raniere owns Rational Inquiry, not Salzman. Raniere also leased the training for NXIVM and all its side business and his trade for using it was 10%. Well if the company was making as much money as they stated in the legal battles over those they claimed were destroying it, that’s a lot of money.

    Clare in her stupid wisdom told the police Raniere was getting threatening mail. When she brought unopened mail addressed to him to the investigator, the mail contained gift cards you buy at the store. These were ment for Raniere to buy some “stuff”. Makes one wonder if this is how they were “washing some cash” from across the boarder.

    There is no way a person can live for decades in the style Raniere lived without a source of income or a hand out. Since giving to Raniere without some how him earning it, would goes against his own “technology”. He would be a total parasite, which he says lowers your self esteem.

    Hey hey hey, drop the fracking mic! Is Raniere the biggest PARASITE in the world? Inquiry minds want to know.

  • Scott Johnson…this is not a blog about Amway. It looks like you are trying to hype your Amway Jihad by steering people to your multimedia platform/portal.

    Seriously dude, give it a rest. Or go start an Anti-Amway Blog…

  • In support of your blog post, John P – from what I have read, Raniere actively encouraged his people not to pay taxes. There is a post on this blog listing the tax liens of several NXIVM members. Raniere’s attitude towards the IRS seems to be similar to that of Scientology before they got their tax exemption.

    • It was part of the recruitment when I did my intensive. They could teach you how to structure things and members pay very little, if any, taxes.

  • I agree with the IRS point. Many crooks who the government knew were crooks but couldn’t prove it in court beyond a reasonable doubt were nabbed by the IRS. Al Capone is a good example.

    By the way, there are a LOT of similarities between Scientology, NXIVM, and MLM scams like Amway. Perhaps John P. would like to join our radio show in the future to discuss these issues. We’ve already had a couple of excellent guests on the show to discuss Scientology and MLM scams.

  • With all due respect to John P. Capitalist, he failed to mention the greatest weapon in the government’s arsenal.
    RICO
    RICO means the Racketeer Influenced Corrupt Organization Act.

    RICO was passed during the Nixon administration to target organized crime.
    And it has been a very effective weapon against the mob in Chicago.
    But RICO has been used against corrupt local governments, political machines, businesses, labor unions, bogus churches and charities and even scams like Raniere’s cult.

    Every blackmail picture and video collected by Mack and sent to Raniere is a separate RICO
    charge against both of them.
    The very fact that AUSA Moira Penza predicted a 3 month trial points to a RICO case.
    https://en.wikipedia.org/wiki/Racketeer_Influenced_and_Corrupt_Organizations_Act

  • Lol the fact you led with “I am not a lawyer” means obvi it’s on your mind. So you either are or a wannabe. Lame. Shameless plug. Let gets some real stories and not collateral cling ons

    • Collateral, huh. Welcome not-quite-yet-escaped-cultist-person!

      We have faith! You can do it! RUN!!!!!

    • Totally disagree with “Sojurner Truth.” Why would stating you’re not a lawyer and open to correction be considered a negative? Although, keep in mind about half the lawyers are wrong in any court case, as 1 usually wins and the other loses.

  • “Today, it’s much easier to pierce corporate veils in networks of shell companies than ever before, so even if some LLC that owns his love nest condo was directly involved, it is easy for the Feds to traverse the network of ownership to higher-level entities and take action against all of it.”

Frank Parlato Investigates

Frank Parlato Investigates

Frank Parlato is an investigative journalist.

His work has been cited in hundreds of news outlets, like The New York Times, The Daily Mail, VICE News, CBS News, Fox News, New York Post, New York Daily News, Oxygen, Rolling Stone, People Magazine, The Sun, The Times of London, CBS Inside Edition, among many, many others in all five continents.

His work helping take down NXIVM is featured in books like “Captive” by Catherine Oxenberg; “Scarred” by Sarah Edmonson; “The Program” by Toni Natalie, and “NXIVM. La secta que sedujo al poder en México” by Juan Alberto Vasquez.

Parlato has been featured prominently on HBO’s documentary “The Vow” and acted as lead investigator and coordinating producer for Investigation Discovery’s “The Lost Women of NXIVM.”

Parlato will be featured in an upcoming episode of American Greed.

If the whole world stands against you sword in hand, would you still dare to do what you think is right?

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