At the conclusion of the most recent Status Conference in the case of U.S. v. Raniere et al., U.S. District Court Judge Nicholas G. Garaufis ordered Keith Raniere’s counsel to provide the prosecution with redacted copies of the indenture for the Legal Defense Trust that Clare Bronfman had set up just before her indictment – and the January 14, 2019 declaration by James Q. Walker, one of the two attorneys who represent the Trust’s trustee.
On February 20, 2019, the prosecution wrote a letter to the judge to inform him about some “additional information” it discovered when it read those documents – and to suggest that he share that information with Raniere, Allison Mack, Nancy Salzman, Lauren Salzman, and Kathy Russell during their Curcio hearings.
The “additional information” that the prosecution discovered includes the following:
– If there is any money left in the Legal Defense Trust, it is to be distributed to Albany area attorney Arlen Olsen in his capacity as the Trustee for the KAR 2018 Trust, which was established on April 15, 2018.
– When asked, Olsen informed the prosecution that the designated beneficiary of the KAR 2018 Trust is Raniere’s youngest son, Kemar.
– Walker told the prosecution that he had originally advised Clare that any leftover funds should be distributed to a charitable organization (Apparently, she decided not to follow that advice).
– Walker had previously advised the Court that more than 75% of the Legal Defense Trust had already been spent – and that the remaining balance is “..likely insufficient to cover all legal fees and expenses associated with representation of the [defendants and beneficiaries] for the duration of the litigation.”
– Walker had also previously advised the Court that there is “…no provision in the trust instrument for Contributors to replenish the trust” – which turns out to be totally false. As noted by the prosecution in its letter to Judge Garaufis, the Legal Defense Trust “…expressly contemplates the existence of additional contributors who may transfer property to the Trust at any time”.
So, let’s see if we can figure out what the hell all this legal mumbo-jumbo means.
To begin with, we now know that the Legal Trust Fund – which would otherwise probably be out of money by the end of next month – was set up in a way that will allow others to make contributions to it.
That, of course, means that the horde of defense attorneys in this case – who are currently sucking money out of that Trust faster than Raniere’s hair is turning grey – may not have to work for free after all.
This previously concealed fact will likely cause Judge Garaufis to request periodic updates on the status of the Legal Defense Trust so he can determine who else, if anyone, has put money into it (Sorry all you would-be-contributors who were assured that you could remain anonymous).
It also means that there is an additional conflict-of-interest because any leftover funds in the Legal Defense Trust will go to Kemar, the love child of Raniere and Marianna Fernandez (Sorry Kathy Russell that we couldn’t afford to have your attorneys work more hours on your defense but Kemar and Marianna really wanted to take that trip to Disneyland).
Of course, the new filing by the prosecution also raises a bunch of new questions:
– Where did the money come from for the KAR 2018 Trust? Did Clare use her personal funds for that purpose? Or were those funds that were previously hidden in Nancy Salzman’s former residence? Or were those funds taken out of the late Pam Cafritz’s bank account?
– Why was Arlen Olsen, an attorney who specializes in Intellectual Property law, chosen to be the Trustee for the KAR 2018 Trust? Having already been paid hundreds of thousands of dollars – and perhaps even millions of dollars – to file Raniere’s various patent claims in numerous countries around the world for the past 20 years, why was he chosen for this role?
– Who decides how much time each of the defense attorneys spends on the case? Do they make those decisions independently based on the needs of their clients – or is Keith Raniere making those determinations?
– What other misrepresentations have the attorneys for the Trustee of the Legal Defense Trust made to Judge Garaufis?
– Will any of Clare Bronfman’s co-defendants be smart enough to ask Judge Garaufis to appoint an independent attorney to represent them – or will they all allow Raniere to continue being the grand strategist behind their legal defense?
So many questions – and so few answers.
And the clock keeps ticking down to the start of the trial.
Tick tock…Tick tock…Tick tock…
Wouldn’t it be funny if Marianna Fernande who was underage when groomed by KAR and his inner circle to have sex with him, filed a law suit against him, Clare and Sara Bronfman, Nancy Salzman, the late Pam Cafritz estate and NXIVM for her molestation/rape.
Mariana could not only walk away with whatever is left in the defense trust fund for her son, but millions of assets from the Bronfman sisters, NXIVM properties and KAR assets from Pam’s estate and his hidden assets.
How much of a baby daddy is he really going to be spending the rest of his life behind bars?
Now this is an article worthy idea Marriana
Krclaviger did not report all of the wonderful possibilities surrounding recent events…..
If the judge believes an actionable ethics violation or other New Your State BBO violation has occurred, the judge has a legal and moral obligation to report the violation to the BBO.
Possible outcomes for an ethics violation include the attorney receiving a fine, an official reprimand and a blotch on their BBO record even possible Disbarment? Disbarment in this instance is highly unlikely.
BBO stands for Board of Bar Overseers.
The BBO is a group of attorneys, each state has a BBO like a medical review board, that polices and supervises all of the attorneys in their state. The BBO licenses and revokes licenses.
The BBO in each individual state investigates and enforces the rules, regulations, and laws regarding attorneys and their clients.
If you ever have a bad attorney report them to the BBO… at the very least you will ruin their day.:)
In a legal case this high profile, the judge will report and the BBO will probably take action and not sweep it under the rug
What about the $8M from Pam Cafritz’s estate? I’ve read that Keith was executor, and then resigned as executor. Who are the beneficiaries? One would think this would be researched in the face of Keith’s claim of poverty on arrest – no assets or income.
There is a bank account out there under Pam’s name, with the money sitting in it.
I speculate that if KAR is acquitted and gets access to $8M plus more Bronfman money, the nightmare will start all over again, under a new name. Only this time, he will have learned quite a bit about how to avoid the law.
If convicted, he will occupy himself by suing the hell out of his attorneys for malpractice. That’s what the man does.
I’m sure the Feds have a handle on the $8 million. If he’s broke, any lawsuits will be inconsequential.
Thank you claviger, for sharing your insight here on FR – so appreciated!
Very interesting, yet only matters if the judge actually does something about it, and I don’t have much hope with all this lax bail business and such.
Although, maybe people won’t be out on bail anymore if there is a more serious superceding indictment.
Krclaviger excellent reporting as always.
Krclaviger are you of the opinion that the trust or defense attorneys have now committed an actionable New York State BBO ethics violation?
I understand if you do not answer.
Theoretically of course.