By K. R. Klaviger
It looks like things are really starting to go downhill for Keith Raniere and his co-defendants.
The latest “bad news” came in the form of a letter from AUSAs Moira Kim Penza and Tonya Hajjar to U.S. District Court Judge Nicholas G. Garaufis in which they raised questions about…(pause for drumroll)…the potential conflicts of interest that are inherent in having all the defense attorneys for Clare’s co-defendants being paid out of the irrevocable Legal Defense Trust that she set up just before she herself got indicted.
To quote Ms. Penza and Ms. Hajjar: “The government respectfully submits this letter to notify the Court regarding a potential conflict involving counsel for each of the defendants in the above-captioned case, except for counsel for Clare Bronfman. This potential conflict arises from the fact that the legal fees of each of the defendants in this case, except for defendant Clare Bronfman, have been, and will be continue to be, paid from an irrevocable trust to which Clare Bronfman is the primary contributor” (This, by the way, is the first indication we’ve had that Clare is paying her own legal fees from a different pot of money).
The AUSAs go on to spell out exactly why they were obligated to tell the court about this potential conflict of interest “…so the Court may conduct the appropriate inquiry pursuant to United States v. Curcio, 680 F.2d 881, 888-90 (2d Cir. 1982). See, e.g., United States v. Stantini, 85 F.3d 9, 13 (2d Cir. 1996); United States v. Malpiedi, 62 F.3d 465, 467 (2d Cir. 1995).”
After listing the “Notices-of-Appearance” that have been filed by all the attorneys who are currently representing Raniere and Bronfman and their current co-defendants – Allison Mack, Lauren Salzman, Nancy Salzman, and Kathy Russell – Ms. Penza and Ms. Hajjar then go on to describe their interactions with James Q. Walker, Esq. and Andrew Podolin, Esq. of Richards Kibbe & Orbe, LLP, the two attorneys who serve as counsel to the Trustee of the irrevocable Legal Defense Trust.
And guess what? It turns out that while the Trust itself may be irrevocable, his tenure as Trustee is definitely not. Yep, he can be removed “for cause” at any time by Clare. And “cause” like “beauty” is in the eye of the beholder – or, in this case, in Clare’s sole and absolute determination.
And guess what else? Mr. Walker refused to turn over copies of the Trust documents to the government. Hmmm…if there’s nothing to hide, then why wouldn’t he…? Oh, never mind, I just figured that one out.
So, back to the filing…
Next, the AUSAs informed the judge 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.”
They then go on to cite an example that is so bizarre that it could only happen in a case involving NXIVM-related parties.
As it turns out, the government had a meeting within the past several months with a witness who had been served with a subpoena that would require her to testify before a grand jury (Although they refer to this person as Witness #1, they also indicate that the person is a female). According to Witness #1, shortly after she was served with the subpoena, one of the defendants gave her the contact information for an attorney who practices in the Eastern District of New York.
When Witness #1 met with the attorney, the attorney explained to her that his fees were being paid by Clare Bronfman. He then told her that he recommended she plead the Fifth Amendment when she was questioned by the government’s attorneys in front of the grand jury.
And here’s come the “are-you-fucking-kidding-me” part. The attorney went on to tell Witness #1 that if she wasn’t willing to plead the Fifth Amendment, she’d have to find another attorney to represent her (He even told her he’d give her a referral. What a stand-up guy!).
Conflict-of-interest for sure. And maybe a little witness intimidation and obstruction of justice thrown in for good measure. Where does NXIVM even find guys like this?
The rest of the filing goes through a detailed analysis of the applicable law on conflicts-of-interest – and cites numerous cases to show why the current fee-paying arrangement creates a potential conflict for every attorney who is representing one of Clare’s co-defendants.
And it concludes with a suggestion that Judge Garaufis hold an inquiry with each of Clare’s co-defendants to determine “…(i) whether the payment of his or her legal fees by Clare Bronfman presents a conflict; (ii) the nature and extent of that conflict; and (iii) whether each defendant is willing and able to make a knowing and voluntary waiver of the conflict. The defendants should also be reminded that, if they cannot afford counsel, they need not rely on a codefendant to pay their legal fees because counsel will be provided to them by the Court.”
Not wasting any time, Judge Garaufis issued the following order earlier today:
ORDER: Defendants Keith Raniere, Allison Mack, Kathy Russell, Lauren Salzman, and Nancy Salzman are DIRECTED to file individual and separate responses to the Government’s letter regarding a potential conflict involving counsel by no later than 3:00 PM on December 5, 2018. Ordered by Judge Nicholas G. Garaufis on 12/3/2018.
To be sure, the judge has to ensure that Raniere, the Salzmans, Mack, and Russell all know that their attorneys have serious potential conflicts-of-interest in this case. And he has to be sure that if they want to still be represented by those attorneys, they waive their rights concerning any such conflicts because otherwise, they might be able to use the conflicts as a reason to have their subsequent convictions overturned.
But shouldn’t the judge go a step further here – and ensure that each of Clare’s co-defendants is being treated equally and fairly?
If he doesn’t do that, then how he can be sure that their waivers will hold up under further scrutiny by an appellate court: i.e, if they don’t really know what’s going on, how can they make informed decisions?
So, shouldn’t Judge Garaufis require the Trustee to provide a full accounting of just how much money originally went into the Trust and where it came from; whether any more money has come in since the Trust was first established and where it came from; and how much was spent on each defendant to date? And he can always do this on an in camera basis to ensure that this information is not shared with the prosecution team.
Then if he sees any huge discrepancies – like if the Trust is spending 100 times as much to defend The Vanguard as it is on Kathy Russell – he can share that information with all of Clare’s co-defendants – which will let them make informed decisions in terms of waiving their rights.
If there’s nothing to hide, then such a full-accounting shouldn’t be a problem for anyone, right?
Frank Parlato 
Janine Morrison 
J.J. O'Hara 
Richard Luthmann 
Marie White 
Paul Serran
Please leave a comment: Your opinion is important to us!
And weren’t they accusing the other side of witness tampering? These people have no shame.
Is this organisation a pyramid scheme of a MLM one? The answer I seek is probably found in the one who is actually consuming the trust funds money the most? Therein might lie the answer. Legal counsel should hear this out, look after your own defendant because they might be thrown under a bus by a bigger brick in the pyramid.
Well, there is one witness flipped.
Give them some credit for having enough brain cells to realise Clare provided legal counsel to protect herself and her few chosen and screw them.
It’s obvious that Clare Bronfman started the legal defense fund for the indicted with 1 of 2 thoughts in mind: all defendants would stick together and support each other against the government or that her payment would buy their common unity and defense.
It’s very amusing to watch how things will play out. It’s dismaying that Mack may take the brunt of damage when Nancy Salzman has been the Queen making the Nx machine role on. Justice is not fair.
That would actually be a legit defensive strategy and not a conflict of interest.
Possible conflict of interest comes from the possibility that lawyers, which are all paid from one defendant’s money could conspire to protect his interest at expense of others. To throw them under the bus in order to help the one who’s paying all the expenses.
Mack may take the brunt of damage when Nancy Salzman has been the Queen making the Nx machine role on. Justice is not fair.
Cry me a river.
Tell it to the women branded like cattle.
Would you, please, post a copy of the AUSA letter for us to read?
Welcome to the world of Raniere’s Raindeer games.
Isnt it a conflict of interest to have witness for the defense have free passage from Mexico, lie on the stand, under oath and not have to worry about perjury charges?
Are there not enough US NXIVM members who can testify for the defense if KAR is worried about women saving sex was consensual?
There is no risk if defendants get a “Get Out of Jail Free Card. That is a conflict against our legal system.
High Dollar Lawyers and Egos. Incoming train wreck…..imagine the challenges involved trying to convince … what, ten or more high paid lawyers for the defense to all get along and play nice. Now, consider the ethical violations at hand starting to emerge. It’s clear Vanguard and Clare have been trying to hold all defendants together as one coordinated and controlled voice. As always, priority number one when it comes to NXIVM is control and intimidation, ordered by Vanguard or his handlers and accomplished with Clare’s money. At first thought one might think little has changed. Vanguard and Clare are still controlling and intimidating everyone with Clare’s money, just another day with another walk through the nuclear waste dump that is Clare’s park called NXIVM.
Now consider for a moment the new filings. You have 10+ high paid lawyers with big egos who are going to have to start thinking about the very real possibility of not getting paid, for the first time. And the ethical conflicts. How about the emerging possibility one or more of the defense attorneys has been caught trying to coerce and pressure witnesses? At this point is it time to consider or at least imagine the possibility of Agnifilo joining Vanguard, Federal Prisoner 57005-177 at the MDC?
Want to see a train wreck, or worse? Watch these high dollar, big ego lawyers as the money starts to slip away and they need to start worrying about whether legal fee invoices will be paid. Should the ten or more defense lawyers file to withdraw now, before incurring more bills that will never be funded, or try to hang on to hope for the very unlikely scenario where the judge decides there’s absolutely no conflicts? Does anyone think these lawyers are going to continue to represent the parties for free, pro-bono? When the lawyers quit, public defenders will probably start pushing defendants to accept plea bargains.
Mere opinion: If I were a defendant in this mess, I’d be begging for a plea bargain sooner rather than later. The Government has been known to make examples of defendants who try to play tough by sending those defendants away for many years beyond what could have been negotiated with a plea agreement, if one were available. NXIVM defendants are lying to themselves if they think their Vanguard, or they, are going to walk away from this.
Wish I could say I’m shocked. Maybe a little that the witness wasn’t also asked to provide “collateral” — or more if she already has. And given a one-way ticket on a manned Mars expedition.
Maybe a good solution you have there, KR. Thanks for the non-shocking dirty deets. Just gotta keep up the faith. AUSA’s are getting every corkscrew, high speed curve ball so far! Pretty miraculous.
I like the way they are spacing out their requests to the judge.
Nxiens must have thought they slipped that one by those silly little female AUSAs.
If the defense is allowed this crazy deal, then the prosecution would be allowed to also.
I see great danger, say a judge in Mexico is bribed to arrest these prosecution witnesses, throw them in jail upon their return and possibly even have them raped or killed. I’ve heard of plots like this for real.
Let’s see what the defendants have for Judge G tommorow? On the trust covered attorneys.
He’s got lots of time to decide the other issue, unless people start disapearing.
Yes, I’m sure they thought they could slip this by those silly little female AUSA’s. Tsk tsk. I’m so looking forward to hearing what goes down in the status conferences tomorrow, too. I think I read some where on this blog about how the gender of the prosecuting attorneys plays some significance. In many ways, I love the optics and irony in this case where we have a cult leader, a male, who is basically selling a product under the guise of promoting the study of ethics and the empowerment of people, namely women. And, then we have two young and ambitious female US attorneys who are prosecuting the case. Just can’t ask for more! I’m fortunate to work at a large well-known company in the Legal Division, and it’s actually very nice to see so many more women attorneys getting into the practice. It’s quite refreshing, actually. Please forgive any typos. I know this pisses some people off.
Good point Heather Anne about the prosecution witnesses in Mexico. No doubt they already know this and will refuse to testify. Only safe passage to the U.S. and a green card may even temp to change their mind, and that is too bad because their testimony would be nice to possibly offset defense witnesses from there.
OMG! Bombshell indeed. Someone pass the popcorn…
This attorney’s behavior is outrageous! I sincerely hope he or she has been reported to the New York state bar.
Lawyers will do whatever they think they can get away with, and the potential conflict is Bronfman throws one or more of them under the bus.
Charles Bundren, the lawyer that Amway hired to sue me had previously sued Amway a couple years earlier, was a former Amway distributor who made tool scam money, and his upline Diamond is now serving 20 years in prison for fraud which was technically unrelated to Amway, but he defrauded a lot of his downline in a financial fraud. He is a total dirtbag.
Bundren has also wasted a lot of taxpayer money, including the “candy cane” case and grossly overcharging for services: https://www.dallasnews.com/news/plano/2010/07/25/plano_s-liberty-institute-expands-reach-from-candy-cane-pens-to-palin-prayer-cross-on-federal-land He is a total dirtbag.
Ruh-rho.
But again, the person who is being represented must assert the conflict. However, an attorney paid for by the Trust cannot say, ‘Plead the Fifth or I won’t represent you’.
Then the attorney is working for a third party and not the client. That is a major rules violation for the attorney.
Because then it appears that the attorney is saying, ‘Play ball with us, stick to our official story of consenting adults in an S&M game. Or go pay for your own attorney.’ And it also means that the Trust is no longer performing its charter and can be dissolved.
Poor Mouse, hear ya loud and clear but you sound as if you’re accustomed to dealing with rational people who work within the boundaries of the law, not NXIVM and their fine finned friends on a feeding frenzy 🦈
Yes, the reason would sound reasonable! Conflict of interest but certainly nothing to do with the trust fund.
If anything, NXIVM should go down in history as givers. They are givers to humanity of the Complete Dummy’s Guide to being Dumber. It’s amazing that all but Clare will end up with Public Defenders, this dynamic will definitely have a huge outcome on this whole sordid story.
OMG this is a bombshell! Perhaps a little infighting here?? Let the war among codefendants begin.
The military has a name for a mess like this that is obscene but starts with the word “cluster”
I prefer the old ‘SNAFU’ principle. Your military has the best idioms and acronyms.
FUBAR is another good description.
Had to look that one up!! Excellent!