Ask Yuri Plyam what kind of tricks he think Keith Raniere might have used [if any] to defraud the Bronfmans out of millions.

A Few Facts About The Commodities Trades – And The L.A. Precision Development Project – And Raniere Owes Tens Of Millions Of Dollars In Unpaid Taxes

[Editor’s Note: There are some points in the narrative that I think I would characterize differently, but overall, Claviger has made some excellent points and puts the tail on the real donkey of the commodities and Los Angeles real estate debacles – Keith Raniere.]

By K. R. Claviger

Over the years, there have been lots of stories told about the commodities trades that were overseen by Keith Raniere – and the so-called Precision Development Project that involved the development of multi-million homes on hillside lots around Los Angeles.

Unfortunately, very few of those stories have been totally accurate – and several of them have been full of downright misrepresentations.

Most recently, the following comment appeared in response to a post about the trial involving the Bronfman sisters’ claims against Yuri Plyam:

Barbara Bouchey found Yuri Plyam, a licensed commodities broker in Los Angeles, CA. I don’t remember the date Yuri was hired offhand but believe it was after Keith lost $1M or so of Barbara’s own money or, some say, money she’d earned as the Bronfman sister’s accountant after joining NXIVM. At nearly 40 years old, however, Barbara was already a very successful financial manager in the Albany area. Barbara was referred to NX by Nancy Salzman in about 2000, a year or so after officially starting ESP, later NXIVM, with Keith. Nancy was Barbara’s “psychologist” or therapist for over a decade prior. Keith seduced Barbara or “they fell in love” rather, overnight. Barbara believed Keith was in love and that they had an exclusive, more or less, romantic relationship until 2009 when Barbara left with the “NXIVM 9.”

Keith called the shots on the trades, per Barbara, but Keith didn’t have a brokers’ license. Yuri and Keith became phone buddies as Keith blew through upwards of 65M loaned to him by the Bronfman sisters in market trades. Keith boasted with Yuri about his abundant sex life saying he enjoyed a different bed every night. Yuri and his gorgeous wife, Natalie, eventually met the Bronfman sisters and joined NXIVM. The Bronfman sisters and Nancy toured LA with the Plyams, selecting some of the LA properties but at trial it was said the Bronfman girls were more interested in playing with the Plyam’s  little girls at their home. Nancy Salzman was officially the Bronfman sisters’ partner in the real estate ventures. Properties were purchased in Nancy’s name and some in the Plyam’s name that the Plyam’s were to retain in compensation for running Precision Properties. There were some properties the Plyam’s testified Keith and Nancy agreed to hold in the Plyam’s name for ease of obtaining development loans in LA. Initially, none were in the Bronfman sisters’ names though they were financing the entire project. Some of the commodities losses on the money loaned from the Bronfman’s were happening pretty much simultaneous to the real estate project development. Clare testified that the commodities losses occurred because, according to Keith, a big, bad Jew in New York — Edgar Bronfman Sr. — was deliberately betting against Keith. Much was made of the commissions Yuri was making due to the frequency of Keith’s trades (fee churning accusations) even though that was not an issue at trial and, again, Yuri wasn’t calling the shots, Keith was. The Plyam’s lost at trial but won on appeal. Today, the Precision properties and company are in Clare Bronfman and James Del Negro’s names. Clare did not disclose these properties on her assets list submitted to the court at her bail hearing as FR reported previously.

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I don’t really have a dog in this fight but, having talked to most of the parties who were involved in the commodities trades – and having had a chance to review a lot of the original documents about the Precision Development Project – I do have some knowledge (and some opinions) about both topics.

Let me start by parsing through that recent comment – and correcting a few factual errors and adding some more details on other aspects.

  • Barbara Bouchey found Yuri Plyam, a licensed commodities broker in Los Angeles, CA. I don’t remember the date Yuri was hired offhand but believe it was after Keith lost $1M or so of Barbara’s own money or, some say, money she’d earned as the Bronfman sister’s accountant after joining NXIVM. At nearly 40 years old, however, Barbara was already a very successul financial manager in the Albany area.

Barbara Bouchey contacted Yuri Plyam before she ever invested any money in Raniere’s patent-pending “Commodities Investment Formula”. Although the account was set up in her name, all the trades in it were done by Raniere.  In the beginning, Raniere followed Yuri’s advice – and was actually making money. But once he started making his own trading decisions, he quickly blew through $1.2 million of Bouchey’s funds.

Next up was Michael Sutton – who was convinced to put up some funds so that Raniere could continue to refine his formula (Barbara and Keith did such a good job of convincing Sutton that they knew what they were doing, he even opened up his own commodities trading account and doubled-down on some of Raniere’s investments, thereby doubling the amount of the losses that he incurred via Raniere’s commodities trading strategies). Total losses for Sutton were approximately $5 million – some of which Bouchey promised to pay back to him (I don’t believe she ever did this).

The important thing to remember about all these commodities trades is that people did not “loan” money to Raniere to make the trades because that’s not how commodities trading works (See HERE for a primer on commodities trading). Instead, Bouchey and Sutton – and later, of course, the Bronfman sisters – “loaned” money to Raniere to cover the losses he had sustained on his trades. And given that Raniere had no known income of his own, these transactions most likely would not qualify as “loans” in terms of how the IRS defines that term and should have been classified as “gifts” that, except for small amounts, represented taxable income to Raniere.

The only way that Raniere could have ever paid back any of the money he “borrowed” from Bouchey, Sutton and/or the Bronfman sisters is if he actually made money on some future commodities trades. And although he did do that on several occasions, he kept losing whatever profits he made by investing in riskier and riskier trades.

Think of someone playing blackjack whose “strategy” is to keep letting his original bet – plus his winnings – ride on the next hand until he finally loses everything. That’s basically how Raniere “invested” in the commodities market.

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  • Barbara was referred to NX by Nancy Salzman in about 2000, a year or so after officially starting ESP, later NXIVM, with Keith. Nancy was Barbara’s “psychologist” or therapist for over a decade prior. Keith seduced Barbara or “they fell in love” rather, overnight. Barbara believed Keith was in love and that they had an exclusive, more or less, romantic relationship until 2009 when Barbara left with the “NXIVM 9.” Keith called the shots on the trades, per Barbara, but Keith didn’t have a brokers’ license.

It was apparently sometime after her divorce that Bouchey started seeing Nancy Salzman. And although Salzman presented herself to cients and potential clients as a “psychotherapist,” she basically had the same psychologist/psychiatrist/therapist credentials as Lucy does in the Charlie Brown comic strip: i.e., NONE.

Although Bouchey has always maintained that she thought she had an “exclusive” sexual relationship with Raniere, several of her NXIVM contemporaries have disputed that claim. Indeed, there have numerous accounts of Salzman, Pam Cafritz and others counselling Bouchey about her unreasonable attachment to Raniere’s penis.

Regardless of the realities of Bouchey’s description of her personal relationship with Raniere, it’s true that she allowed him to make all the decisions about the commodities trades in her account. What that says about her prowess as a financial planner is an interesting question.

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  • Yuri and Keith became phone buddies as Keith blew through upwards of 65M loaned to him by the Bronfman sisters in market trades. Keith boasted with Yuri about his abundant sex life saying he enjoyed a different bed every night. Yuri and his gorgeous wife, Natalie, eventually met the Bronfman sisters and joined NXIVM.

While it is true that Yuri spent a lot of time on the phone with Raniere, he always considered him to be a “client” rather than a “friend” (Those phone calls were almost always initiated by Raniere – who, much like a teenager, loved to regale Yuri with stories about all his sexual conquests). Although Yuri and his wife, Natasha, did attend three ESP Intensives over the course of eight years, they never considered themselves to be “members” of ESP (Natasha often had trouble staying awake in the classes).

From the Plyams’ perspective, the relationship with Raniere was purely business in nature. But, as with any important client, they did spend some social time with him – and even attended a few of his training classes.

As explained earlier, the Bronfman sisters did not provide Raniere with $65 million to invest in the commodities market. Instead, they agreed to cover any losses that he might incur as he “tweaked” his patent-pending “Commodities Investment Formula”.

But because he kept doubling and tripling down on his losing investments – and also rolling over his winning investments until they too became losing investments – he eventually had to come up with $65 million to cover his margin calls.

So, when the Bronfman sisters ponied up all the funds that were needed to cover his losses – and he agreed to stop making any more “investments” in the commodities markets – they knew damn well that they would never get any of that money back.

All the Bronfman-related commodities investments were made through a  company named First Principles, Inc. – which was, of course, in Nancy Salzman’s name, rather than in Raniere’s name.

The problem was that Salzman, as the owner of First Principles, Inc., ended up with $65 million of capital losses – but had no capital gains that those losses could be applied against (See HERE for an explanation as to how such capital losses are supposed to be handled).

So, the most that Salzman could write off on an annual basis with respect to those commodities losses was a paltry $3,000 – meaning it would take her more than 21,000 years to utilize all of those losses as income tax write-offs.

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  • The Bronfman sisters and Nancy toured LA with the Plyams, selecting some of the LA properties but at trial it was said the Bronfman girls were more interested in playing with the Plyam’s little girls at their home. Nancy Salzman was the officially Bronfman sisters’ partner in the real estate ventures. Properties were purchased in Nancy’s name and some in the Plyam’s name that the Plyam’s were to retain in compensation for running Precision Properties. There were some properties the Plyam’s testified Keith and Nancy agreed to hold in the Plyam’s name for ease of obtaining development loans in LA. Initially, none were in the Bronfman sisters’ names though they were financing the entire project.

Originally, the deal was structured so that Yuri would get one-third of the profits from the sale of the various Precision Development properties (Another one-third of those profits was supposed to go to Salzman – and the remaining one-third to the Bronfman sisters). It was never intended that Yuri would end up owning any of the properties.

Most of the properties were originally titled in the name of the company that had been set up to oversee the project: i.e., Precision Development, LLC. It was only when a particular property went from “undeveloped lot” status to “home under construction” status that a property was titled in someone’s name – and that was because the banks that were providing the funding for the construction required things to be done in that fashion.

The only property that ended up in Nancy’s name was the 33-unit condo project on Libbit Avenue. That was also the only project for which she signed the construction loan documents.

The original plan was to invest the Bronfman sisters’ $26 million into acquiring hillside lots and preparing them for construction (This preparation generally including a tremendous amount of grading – and the construction of caisson foundations).

After a site was fully prepared, a construction loan would then be taken out and the house would be built. All but one of these construction loans were taken out in Yuri’s name – which, per the lending bank’s requirements, meant that each of these properties had to be titled in his name while a house was being built on it.

When Raniere decided to blow up the Precision Development deal, he hired Frank Parlato, gave him misinformation, and Frank went to Los Angeles to confront Yuri.

Yuri and Frank agreed on an “Operating Agreement” giving the Bronfman sisters two thirds ownership and it was signed within a month of Frank’s arrival in L.A. Per the terms of that agreement, the profits from the Precision Development venture were to be split as follows: one-third to Yuri, one-third to Salzman, and one-third to the Bronfman sisters.

Within 24 hours of the signing the agreement, Salzman, fearful of being charged with fraud, transferred her one-third share to the Bronfman sisters.

Per his unsigned agreement with the Bronfman sisters, Frank Parlato was supposed to be paid 1/3 of their share of the profits from the Precision Development Project and was to manage the project.

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  • Some of the commodities losses on the money loaned from the Bronfman’s were happening pretty much simultaneous to the real estate project development. Clare testified that the commodities losses occurred because according to Keith, a big, bad Jew in New York — Edgar Bronfman Sr. — was deliberately betting against Keith. Much was made of the commissions Yuri was making due to the frequency of Keith’s trades (fee churning accusations) even though that was not an issue at trial and, again, Yuri wasn’t calling the shots, Keith was. The Plyam’s lost at trial but won on appeal. Today, the Precision properties and company are in Clare Bronfman and James Del Negro.

This story about Edgar Bronfman interfering with Raniere’s commodities trades is, of course, total made-up bullshit. In reality, Raniere was taking such large positions on some commodities that the federal agency overseeing the market forced him, on several occasions, to reduce his holdings.

The bottom line is that Raniere lost $1.2 million of Bouchey’s money, $5 million of Sutton’s money, and $65 million of the Bronfman sisters’ money because he had no idea what the fuck he was doing. It’s really as simple as that.

What is also true is that the combination of the commodities losses and real estate investments did put a strain on the Bronfman sisters’ cash flow. Indeed, at one point Bouchey arranged for them to borrow $20 million against one of their future trust payouts so that they could keep both things going (Another great piece of advice from their financial planner – who, by the way, more than recouped her $1.2 million of commodities losses via the fees she earned as the Bronfman sisters’ financial adviser).

The bottom line on the Precision Development trial against Plyam is that the Bronfman sisters spent about $8 million in legal fees to get a $10 million verdict that they never collected. Plyam filed for bankjruptcy.

They do, however, still own some prime building lots in the hillsides surrounding L.A. In order to build on these lots now, however, the original caisson foundations – which they spent millions to build – would have to be removed – because they left them exposed to the elements too long.

Additional grading work would also have to be completed.

It is not known if any of the Precision Development properties ended up in Jim Del Negro’s name. Since, however, he ostensibly took over as “Project Manager” after Frank was fired by the Bronfmans, that is a possibility.

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  • There were some properties the Plyam’s testified Keith and Nancy agreed to hold in the Plyam’s name for ease of obtaining development loans in LA.

At the time that Raniere decided to blow up the Precision Development Project, there were four (4) houses that were almost completed and ready to go on the market. Interestingly enough, when Yuri offered to transfer the almost-completed properties that were still in his name, the Bronfmans’ attorney, Bob Crockett, rejected that offer.

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  • Initially, none (of the Precision Development Project properties) were in the Bronfman sisters’ names though they were financing the entire project.

As previously explained, this is how Raniere originally structured the project. All of the properties were held in the name of the company, Precision Development LLC until they were ready to have homes built on them. Then, in order to get the necessary funds for construction, a property would be transferred to whoever signed for the construction loan. Thereafter, when the finished property was sold, the proceeds would be transferred back to the company.

The issue was that the Bronfman sisters did not own any portion of Precision Deevlopment. Once again, this was by Raniere’s design. When Frank went there, he insisted that the Bronfmans be listed as part-owners of the company. Raniere agreed – reluctantly – and this was the seed of Frank’s being fired.

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The only way that the Bronfman sisters could show any “losses” was by refusing to take ownership of the 4 partially-completed houses. These houses were eventually foreclosed upon by the banks that had provided the construction loans for them.

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Frank Parlato did, in fact, succeed in getting an agreement signed that ensured the Bronfman sisters would get 2/3 of the profits from the sale of the properties. And since those profits were projected to be approximately $15 million, that would mean they would have made approximately $10 million between them.

Had Frank not managed to get the agreement signed with Yuri, the Bronfman sisters would have nothing to prove that they were supposed to get any of the profits from the Precision Development Project. How the hell Raniere and Bouchey convinced them to advance $26 million without anything in writing is beyond my comprehension.

But Raniere then convinced the Bronfman sisters to fire Frank and put Jim DelNegro in charge of the Precision Development Project. Del Negro’s only known experience in real estate is that he signed a couple of leases for apartments where he lived. As a result, the entire project cratered – which is exactly its status as of today

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So, there we have it: the real story of Keith Raniere’s commodities trading skills – and the real story of the Precision Development Project. And just like everything else he ever touched, both of these ventures turned into epic failures because of Raniere’s compulsion to lose and destroy things of value and people.

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Viva Executive Success!

About the author

K.R. Claviger

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  • Great article, Klaviger. Appreciate the informative links, too.

    I think you should invite Barbara Bouchey to rebut in all fairness. I will say she rather recently insisted to me (and Frank) that the Bronfman’s funds Keith played the market with were repayable loans not gifts. Or maybe I shouldn’t say, but she did. IDK what Clare believed, probably anything Vanguard & Prefect told her to — like that her Dad manipulated the market losses. I remember now how deftly the Bronfman’s counsel, Bob Crockett, played off those oversight agency warnings to reduce the market holdings — you mentioned — as maybe a sign that Keith’s investment strategy *was* being thwarted just by the cock of his brow at the jury — with Yuri and Natasha (those shifty “Russians”) somehow in on it. Guess that’s why guys like Crockett get the big bucks and innocent folks who can’t afford a Crockett O’shit like Joe O’hara go to prison.

    I’m reluctant to say anything about any Keith penis ownership lectures you suggest clued Barbara in that she was not in anything close to an exclusive relationship with Keith, except that Kristin Keefe gave me that same lecture in regards to Gina’s issues with penis ownership and penis envy when it came to Keith’s cheating —er, ployamorous — ways, too. It rings true that that became part of the playbook some sincerely took as their bible, and Barbara might have received a stern warning about that —which would be inconsistent with the notion she didn’t know she wasn’t the only one…or so.

    But I’ve heard elsewise, plus love is blind and Barbara was, maybe still is, in love with the fantasy of Vanguard. IMO. She lost what many consider a lot of her own money and stayed, further losing precious time in the last sigh of her child bearing years to the Bluebeard, like so many others.

    Many couples and good men were also near-ruined, as well. It’s good to see Yuri’s smiling, happy face on this post! I hope he and Natalia finally feel fully vindicated.

  • As you say “Some of the commodities losses on the money loaned from the Bronfman’s were happening pretty much simultaneous to the real estate project development.” Must have been a maelstrom of epic proportion – of the kind seen when a grift goes awry i.e., no one seizes the reigns because everyone knows (before they should) that what they are flogging is a dead horse.

    A good grift should play out like a well told joke – the mark ought not to predict the punchline and should be overcome – splitting their sides – as the grifter waltzes off into the sunset with the prize..

    In this Raniere/Salzman Grift, Frank turned out to be the catalyst for truth, and that being kryptonite to a grifter – his actions made it impossible for keith’s jolly wheeze – A sort of pincer movement, grabbing the Bronfmans’ fortune on two fronts, – to play out according to plan.

    When Frank exposed the real estate shenanigans – which clearly exposed Raniere – the penny must have dropped, and cast doubt on the explanation given by Raniere for the concurrent commodities losses, but what an overwhelming bastard of a thing to learn.. what would they give, having given their trust and faith, for this evident truth and their HUGE error of judgement NOT to be the case..?

    Next thing, a great flurry of panicked disassociation, a clear retreat into denial in the face of a plain truth –
    Raniere’s involvement – the rolling out of drastic measures involving character assassination, outright obloquy come into play.

    Keith’s next move is to blame the Plyams and Bronfman Senior, but this would not be sufficient to remove the catalyst that put a spanner in the works in the first place, so Parlato too must be dealt with, sullied, character assassinated.

    There are no limits to the outrageousness of the obliquy: the Bronfmans shafted by their own father, DelNegro raped by a tiny lady. The persistent decimation of Toni Nathalie who Raniere clearly wanted to grind into poverty among other punishments, then his own child and baby-mother living in hiding- for pity’s sake, John Tigue, Joe O’Hara, and now, of course Frank Parlato.

    Having read the early articles on Shmueli, I get why Frank set up a protective network of accounts, that he did so in his own name and ss number removes the possibility of this being for criminal/tax evading activities. I know from his actions and transparency (his accountability) that Frank is not guilty as charged by any nxivm related entity. Or indeed any entity prompted by his efforts to expose their criminality.

    I found this from 2017, S. Shmueli still playing the justice system, as grifters do, like an accessory to the crime in progress, a sort of private executive secret service.

    https://caselaw.findlaw.com/ny-supreme-court-appellate-division/1855054.html

    NY3d 706;  see generally Lloyd v. Town of Wheatfield, 67 N.Y.2d 809, 810).  “We thus conclude that the court properly granted defendant’s motion for a directed verdict because, upon the evidence presented, there was no rational process by which the trier of fact could find in plaintiff’s favor.”

    I’ve been up a mountain for Christmas, still catching up. But for the new year 2019, I wish for Frank Parlato and all victims of Raniere, that they receive Justice one and all.

  • Wow. Keith actually lost the 65mill. I thought all this time that he’d just swindled it to an offshore account. What a fucking dunce. Or not…Keith knows everything and never makes mistakes – right Nancy?

  • This report could be subtitled: “Raniere Investments: A Study in Hubris and Stupidity”.

    I have had experience trading commodities and investment real estate. For an unskilled trader relying on a broker “can be” a good idea IF the broker is honest, ethical, competent and knowledgeable. Not many traders in the world qualify in all those areas. Most traders rely on outdated research formulated by a sales and marketing department or experts with little in depth knowledge. The problem with trading any commodity is that one does not have control over the vast array of elements that influence the commodity. For example, I was buyer in the gold market in late 1979 and had several positions with small losses until the Russians invaded Afganistan and my positions increased in value in excess of 2,000 %! That was a dramatic turn of events no one could have predicted and was pure luck. Similarly I got lucky in copper and made a 500% return in 1 week! Unfortunately, subsequent trades I made were not as lucky. I was grateful to have walked away with decent profits and a lot of wisdom. The profits were used to fund real estate projects in Boston which provided more reliable returns but were not without risks. All investments require sound business knowledge and one must be prepared to handle downturns in any market. Regardless, however, realizing my commodity success had little to do with my knowledge or strategies I stopped trading them entirely and have never returned. Brokers in commodities rarely disclose how little they know and are largely untrustworthy. When they do succeed it is a matter of luck, not skill.

    How Raniere did not quickly figure this out is beyond me? Furthermore, with the advent of on-line computer trading it is not necessary to ever use a broker and fees are minimal regardless of the size of the trade. The biggest mistake KAR made was to not test his theory or commodity model with small amounts of money.It is not necessary to risk large amounts of money to test theories.. One can buy mini-contracts at 1/10 the value or simply trade on paper to test any theory. In the end, most people should never trade commodities unless they are in the industry they are trading and are using it as a protective hedge to protect against a sudden drop in prices etc.

    • You are right about the good sense of testing a commodity model with small amounts. Is there a way of falsifying the figures so that raniere could have led the Bronfman’s to believe they lost 65M, when really the amount he gambled was closer to 65 thousand? would there be a way of concealing and siphoning off the difference?

  • Up to 95% of the people who “invest’ in the commodities LOSE money.

    Learn the Top Reasons Why Commodity Traders Lose Money
    If you have not heard by now, most people who trade commodities lose money. Most of the estimates range in the 80 to 95 percent range of those who have lost or who are losing in the world of trading commodities. Those statistics are dismal for someone who wants to venture into trading commodities.

    https://www.thebalance.com/top-reasons-why-commodity-traders-lose-money-809165

    The Bronfman sisters should spend less time playing with little girls and take a few business classes at the local community college.

  • Great article!!!

    Is it possible that Yuri and Kieth made forgeries and papered the losses to get the Bronfman money? Can the Bronfmans write of a portion of their loses on their taxes? Or can anyone come up with some other angle other than Keith gambled away all that money like a moron.

    I just can’t get my head around that anyone would trust the evil hobbit Keith Retardi with so much money. Unless of course the sisters are even dumber than Frank makes them out.

    Then again …….The world’s most ethical man, the worlds most intelligent man……the man with the world’s most squared feet. I guess I would trust him with my money.

    Again great article thanks.

    You get my vote for the Frank Report Award 🥇 of Excellence in Writing for 2019!!!

    • Several people have speculated that Keith and Yuri may have conspired to fake the commodities losses – and the trades never really happened. But, if that’s the case, then Bouchey had to be in on the conspiracy because, in her role as the Bronfman’s financial adviser, she actually had records of all the trades.

      The Bronfmans could not take any capital gains losses because the account that was used for the commodities trading was not in their name. Instead, it was in the name of First Principles, Inc., which is another company that was owned 100% by Nancy Salzman.

      The best that the Bronfmans could have done is write-off the $65 million as an uncollectible loan. But, as I noted in the post, it is unlikely that the IRS would recognize their transfer of the $65 million as a loan because there was no ability on Raniere’s part – and no real expectation on the Bronfmans’ part – that the funds would ever be repaid.

      The bottom line is that Nancy Salzman ended up with $65 million of capital losses – which she can write off against future taxable in come at the rate of $3,000 per year.

      Viva Executive Success!

      • If this was happening in a casino you’d have to question the integrity of the house – who won all these losses? what were the commodities? who was trading/selling them?

About Frank Parlato

About Frank Parlato

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