NXIVM teaches Executive Success Programs.

What happens to money NXIVM made? Can it be used towards defense? Or can it be claimed by Feds?

A reader who goes by the handle “ionwhitepoetry” raised those questions in a comment about the recent post concerning the legal defense trust fund that was set up by Clare Bronfman to pay for all the defense attorneys who are representing her and her current co-defendants: Keith Alan Raniere AKA “The Vanguard”; Nancy Salzman AKA “Prefect”; Lauren Salzman AKA “The Toucan”; Allison Mack AKA “The Pimp”; and Kathy Russell AKA “The Ageless Ballerina”.

And since Frank Report likes to answer readers’ questions, let’s take a shot at answering these.

But before we do that, let’s start by trying to figure out just how much money NXIVM/Executive Success Programs (ESP) might have taken in over the years (For purposes of this exercise, we’ll just ignore all the other NXIVM/ESP-related schemes that Raniere hatched over the years: J’ness, Rainbow Cultural Gardens, etc., etc., etc.).

NXIVM/ESP has claimed that it had more than 17,000 people take at least one of its training courses. Whether that figure is accurate is debatable but since we don’t have a better estimate, we’ll use that one.

Based on feedback from several upper echelon members who left NXIVM/ESP long before the shit hit the fan, we know that most of the people who took a NXIVM/ESP training course didn’t come back for more.

So let’s assume that 80% of the 17,000 NXIVM/ESP “students” quit after their introductory courses (Maybe some other former members can let us know if that’s a reasonable figure).

To begin with, if all 17,000 “students” spent, on average, $1,000 for their introductory courses, that’s a tidy $17,000,000 of revenue for NXIVM/ESP.

And if 850 of those 17,000 “students” spent an additional $5,000 before they left or NXIVM/ESP ceased operations, that would be another $4,250,000.

And if another 850 of those 17,000 “students” spent an additional $10,000 before they left or NXIVM/ESP ceased operations, that would be another $8,500,000.

And if another 850 of those 17,000 “students” spent an additional $15,000 before they left or NXIVM/ESP ceased operations, that would be another $12,750,000.

And if another 850 of those 17,000 “students” spent an additional $20,000 before they left or NXIVM/ESP ceased operations, that would be another $17,000,000.

Wow! If those estimates are accurate, that would mean that NXIVM/ESP took in a cool $59,500,000 during its 20-years or so of operations. Not bad – about $3 million per year (Once again, it would be helpful if some former NXIVM/ESP members can let us know if those are reasonable figures).

So, what the hell happened to all that money?

Well, before the Bronfman brats came along with their hundreds of millions of inherited funds, some of those revenues had to be used to pay for operational expenses.

And the upper echelon members had some pretty expensive tastes. At one point, Prefect reportedly had a $50,000/year “clothing allowance” (Because the IRS would consider that to be taxable income, she just never reported any of it).

So, let’s say that, on average, NXIVM/ESP’s expenses ran 80% of its gross revenues – which, if anything, might be a little on the high side. That would still leave a nice little pile of about $12,000,000 for Raniere to squirrel away.

If they haven’t already done so, the Feds obviously need to bring in a forensic accounting team to track down what the real figures are.

But, even if all the above assumptions and estimates are off by half, there’s $6,000,000 sitting around somewhere – minus, of course, the $500,000 or so that they found when they raided Prefect’s house (Maybe that piddling amount was left behind on purpose).

***

So, back to ionwhitepoetry’s questions: “What happens to the money NXIVM made? Can it be used toward the defense? Or can it/is it claimed by the government?”

Well, the Feds have already laid claim to the cash they found in Nancy’s house plus the house itself – and Raniere’s sex lair, which was generally referred to by members of his inner circle as “The Library”.

Why they haven’t done the same with respect to all the other properties that are/were owned by NXIVM/ESP-related entities is an interesting question. Given that they added an asset forfeiture specialist on their team fairly early on, it’s quite likely that the prosecutors are just getting started on this aspect of the case.

The “bottom line” is that if the Feds find any more assets, they’ll probably attempt to make NXIVM/ESP forfeit them. At least I hope so…

***
The problem with going through this type of exercise is that there are no “hard figures” available with respect to NXIVM/ESP’s actual revenues over the past 20 years.

Come to think of it, maybe that’s why they indicted The Ageless Ballerina. She was, after all, the one who started keeping the double and triple sets of books for all of the companies in Raniere’s evil empire.

That’s why I encourage readers to do their own calculations – and see what they come up with. We’re all in this together. So, don’t be afraid to share your thoughts…

***
One other thing: You can pretty much assume that there are going to be numerous civil lawsuits filed against at least some of the defendants (Clarebear will, of course, be named in every one of them!).

And I don’t mean ones like the very shaky class action lawsuit that has already been filed by an overanxious attorney trying to get to the front of the line.

I mean very serious lawsuits that will put all of Carebear’s assets – and maybe those of her sister – in real jeopardy.

And when they find all the money that Raniere has squirreled away over the years – which they very likely will – he can also kiss those funds goodbye.

Yep, payback is a real bitch…

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krclaviger

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  • Wonder if the IRS will be looking at NXIVM’S recruiters and coaches for money they made? Might be a good way to get some of them to sing a little.

  • That’s an interesting article Scott. Maybe Omar needs to win the class action suit in order to pay off all the fees he owes… 🙂
    Good luck with that, Omar.

  • In the larger scheme of things, NXIVM is small potatoes in MLM scam-land. At it’s height, Amway alone did nearly $1BILLION/month in Amway products, and this doesn’t count the Amway Tool Scam money, which would easily double the amount. Thanfully, Amway is now about 2/3s of what it once was, which means less people are being ripped off, but it needs to be 0/3s. Keep in mind most NXIVM people were relatively weatlthy compared to most of the millions of people scammed by MLMs every single year.

  • I totally agree with this, “And I don’t mean ones like the very shaky class action lawsuit that has already been filed by an overanxious attorney trying to get to the front of the line.” The “overanxious attorney,” Omar Rosales, who got rejected by the Supreme Court when he appealed his lawsuit he repeatedly lost and appealed all of the way to the top court, therefore owes over $200,000 and is suspended from practicing in the Western District of Texas for 3 years because he threatened business all across Austin, TX for minor/non-existent ADA violations, and now it’s getting even worse for Omar: https://www.kxan.com/news/local/austin/lawyers-and-businesses-aim-to-collect-235-000-from-ada-attorney-omar-rosales/1581507071

    After the IRS rips NXIVM a new one (financially), and all of the other civil lawsuits get their piece of the action, there won’t be much for Omar to get back. He has an inflated opinion of himself, as he was involved in NXIM and thinks he is a savior of some sort, whereas the reality is he just a one-trick pony, everything is a lawsuit opportunity.

    • Another great insight from Scott Johnson.

      The same Scott Johnson who worked ‘undercover at Amway for 4 years’, claimed to have CIA brain implants, and talks about UFOs on his radio show.

      I guess Scott forgot that attorneys in Texas are immune from legal fees.

      http://www.ndtexblog.com/?p=4265

      Oh well, back to the CIA implants.

    • Scott: lawyers in California pursue these lawsuits 365 days a year, without consequence. Many properties ARE in fact out of ADA compliance. I don’t know every nuance of Omar’s alleged violations, but I would not rush to call him a “one trick pony. If he is looking to make a buck, with all due respect, weren’t you, when you got involved with Amway? Must you shoot everyone down on sight?

      You can cast stones at a whole laundry list of people here, including Frank. But how does that help things?

      • The article lists the facts of the case, including this:
        Rosales filed more than 380 lawsuits alleging technical parking lot, signage and doorway ADA violations in 2015 and 2016. As the lawsuits wound their way through federal court, Rosales was caught fabricating evidence, filing a groundless protective order and making false statements against a defense counsel, civil rights attorney Jim Harrington, who defended several businesses pro bono.

        I thought it was interesting because I noticed that Omar had once chimed in here seemingly only to mention Kristen Kruek’s Whistler trips, and then strangely enough “Anonymous” quickly located old tweets where Kruek mentioned Whistler along with some mysterious nefarious annuals, (which some immediately decided could only be references to money laundering.) Hmmm..
        So the fabricating evidence part seems likely.

  • My biggest fear when it comes to this case is that Raniere gets acquitted and digs up the hidden money (in the multi-millions) and goes on to either hide very comfortably away or goes on to hurt more people. Please God, bring the hammer down on this pedophile and bring it down hard.

  • ION’s concerns are legit. Why should these Nx grifters be allowed to continue benefitting from their victims’ essentially stolen loot?

    What’s more, apparently a good deal of it is being used in their no-holds-barred defense to stick it to Uncle Sam — US, We, the tax payers of United States of America — with all sorts of completely outrageous, frivolous, “creative” motions like this Attorney-Client privledge evidence concealment strategy, and poetic pleadings extolling the plight of enigmatic Ancient Greeks?!

    The court already knows they are hiding assets like the Los Angeles properties FR advises were curiously not listed in Clare’s bail motions — along with Nx’s own refugee Island in Fiji.

    I don’t wanna rant on too much, but I’ve seen prosecutors confiscate cell phones off defendants on the spot in traffic court for unpaid DUI’s.

    Any way we can motion the court to set-up a victims fund? Some are in need of scar reversal procedures while others quite obviously could use some mental health treatment here! 😆

    • I’ve often wondered how much property Clare might own in the UK. Our government isn’t very clued up on overseas buyers. As long as the money came in, the politicians didn’t really care if it was dirty money.

      • Pyriel, our govt(the UK) is very clued up on overseas buyers. In my london borough, tracts of land and buildings are routinely sold to non-domiciled residents, rules concerning planning, routinely traduced to generate enormous bungs for those govt employees in the pockets of overseas developers. Even when we manage to rally our council to overturn a recent decision to overturn the building of a £67 million apartment block on the site of newcombe house, in comes the Mayor of London to overturn the democratic decision, in favour of tax paying residents, for one that suits the non-domiciled billionaire class of that no mans land that is everywhere and nowhere. They are clued up. They know full well what is dirty and what is not. We still have families with no homes in this borough, from the Grenfell disaster. Non domiciled wealth is a threat to everything that belongs in and to a Nation State.

        • It is only in recent years that estate agents have to look into where a buyer’s money originates from and whether it came from dodgy money. The government didn’t give a damn for decades but the public caught on and now they are going after Russian investors.

    • Much of the money came from the Bronfmans’ inheritance and is not subject to seizure (at least directly, the IRS is a different story), and they can afford much more expensive lawyers than the people who get their cell phones confiscated on the spot in traffic court for unpaid DUIs.

  • This should be part of the money laundering / tax evasion investigation. I’ll bet a lot of those classes were paid for by check and / or credit card. Those would necessarily show the “payee.”

    Hopefully Karen Unterreiner is helping the feds with all that.

    No doubt all the money was used to support the upper echelon’s lavish lifestyle and a great deal was hidden away.

  • Didn’t they also pay out continuous fees for EM’s? And the impression I have of the amount of debt members went into, because of course, this was an investment in their future. I’m sure you’re giving them a huge break.

    Since most of us despite our horror over the treatment of women feel that its financial crimes will bring them down, have confidence that the IRS and FEDS will be actively pursuing this side of things.

    Great article, it’s time we looked at their other crimes.

  • It is ridiculous for NXIVM people, at least post 2012 to claim money back they spent on NXIVM bullshit.

    Once you were on the striped path and knew about bad things inside the cult such as tax evasion, money laundering and the sexual culture inside the cult, as well as the fact that Keith Raniere was exposed as a pedophile, means you should not be able to claim money as you chose to be there, hand over cash, gloss over the bad stuff you knew about and even continue to bring people in under false pretences. You don’t get to play the victim card when you knew about NXIVM victims and could not care less.

    The likes of Kristin Kreuk, Kendra Voth, Mark Hildreth, Olivia Chang, Sarah Edmondson, Mark Vicente, etc. as an example have absolutely no right to claim a penny or a dime. It was all their own choice to spend copious amounts of money on crap while getting others to do the same. If someone told them NXIVM was a cult and they didn’t want to hand over money, they would probably lie through their teeth, call all the critics “suppressives” and pretend the bad stuff they knew about was not true.

    The feds should take the money and help wounded veterans or something.

    • MLM scams encourage their people to stay away from the media, the internet is described as what is written on truck stop bathroom walls, and to stay away from any outsider information for that matter, and they are all described as losers, don’t have vision, etc., and that the MLM [scam], in this case NXIVM, has all of the answers. So I wouldn’t assume these people are aware of what happened after 2012. This is not to say that some of the people didn’t know about some of the abuses.

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