Kathy Russell’s Motion To Dismiss Is Denied: Plea Deal Seen As Imminent

Kathy Russell’s last-minute Hail Mary pass has been batted down by U.S. District Court Judge Nicholas G. Garaufis.

In a very detailed and well researched Memorandum & Order, Judge Garaufis has denied Kathy’s request to have her indictment dismissed on the basis of prosecutorial misconduct.

And then, to add disdain to the denial, Judge Garaufis also denied her request for an evidentiary hearing that, if granted, would have allowed her to see all the evidence that the prosecution has amassed against her.

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Russell’s travails began when she was served with a subpoena on April 25, 2018 that required her to testify before the grand jury in Brooklyn, NY that was hearing evidence about the NXIVM criminal enterprise.

Rather than retain her own attorney who would be able to give her unconflicted legal advice, Kathy decided to utilize one that was being paid for by Clare Bronfman, the Director of Operations and de facto Chief Executive Officer for NXIVM.

That turned out to be William Fanciullo, an Albany, NY-area attorney who once served as an Assistant U.S. Attorney.

Fanciullo reviewed the subpoena – and apparently decided that since it was not accompanied by an “Advice of Rights” form or a letter indicating that Kathy was a target, she was only being called to testify as a witness.

On April 30th, Fanciullo sent an email to the prosecutors in the Office of the U.S. Attorney for the EDNY to inform them that he was representing Kathy.

Within 15 minutes of receiving his email, the prosecutors contacted Fanciullo – and offered to discuss Kathy’s scheduled appearance before the grand jury.

But Fanciullo never responded to the offer – and, instead, simply accompanied Kathy to Brooklyn on May 10th.

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And so Kathy appeared before the grand jury with only a scrap of paper in her hands to protect her.

On the paper were the words that she would read whenever she chose to invoke her Fifth Amendment rights against self-incrimination.

After she was sworn in, Kathy was informed that she was not a “target” of the investigation. She was not, however, told that she was not a “subject” – and never asked any follow-up questions about her status.

Even before the prosecution informed her about her Fifth Amendment rights, Kathy decided to invoke them when she was asked the following questions:
(1) Was she paying for Fanciullo’s legal services?
(2) Had she recently destroyed any NXIVM-related documents?

Not exactly the ideal way to get started. Especially when she decided not to invoke those same rights when asked many other questions.

For the next 1½ hours, Kathy was asked questions about a range of topics, including her experiences with Nxivm; the courses she took; her positions within Nxivm; the nature and philosophy of Nxivm and related entities; and certain Nxivm rules, rituals, and ranking systems.

Sometimes, she answered. Other times – approximately 50 times – she invoked her Fifth Amendment rights.

Some of the topics that Kathy refused to answer questions about are as follows:
• Her education level;
• Her weight;
• Her decision to move to Albany to work for Nxivm – and leave her son behind in Alaska;
• Her duties and responsibilities as Nxivm’s bookkeeper;
• Keith Raniere’s sexual partners;
• Whether she was a member of DOS or had ever discussed DOS with Keith Raniere;
• Why she did not ask other NXIVM members whether they were branded;
• Whether she knew anyone in Nxivm who had had an abortion;
• Whether NXIVM stored cash at Nancy Salzman’s house; and
• Whether she had ever heard of anybody being confined to a room for a long period of time.

After a short break – during which she conferred with Fanciullo – Kathy returned to the grand jury room.

This time, however, she invoked her Fifth Amendment rights on almost every question she was asked.

These included questions about:
• Whether Keith Raniere has any children;
• Whether she knew if certain individuals were members of NXIVM;
• Whether she had any debts; and
• Whether she knew of cash being brought into the U.S. by agents of NXIVM.

When Kathy was done testifying, the prosecutors, along with several FBI agents, met with her and Fanciullo – and offered to meet with them pursuant to a proffer agreement.

On May 14th, Fanciullo requested – and was provided with – a copy of the proffer agreement. On May 22nd, he turned down the offer, thereby sealing Kathy’s fate.

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Kathy was indicted on July 23rd – along with Nancy Salzman, Lauren Salzman, and Clare Bronfman.

On August 9th, Justine A. Harris replaced Fanciullo as Kathy’s lead counsel.

Since that time, Harris and her partner, Amanda Ravitch, have filed numerous documents in support of Kathy’s request for a dismissal.

That battle is now over.

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At the same time that Harris and Ravitch have been seeking to have Kathy’s indictment dismissed, they have also been engaged in plea deal negotiations with Moira Kim Penza and the other members of the prosecution’s team.

Most court observers believe that the prosecution has no interest in prosecuting Kathy to the fullest extent possible.

Evidence of that can be seen in the second superseding indictment – which includes only one count of Racketeering Conspiracy against Kathy.

The first superseding indictment had also included one count of Racketeering – and two predicate acts: conspiring to illegally transport a woman across the Canadian border – and installing a “key-logger” on a computer of an accountant who worked for NXIVM so they could monitor his emails.

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So, what’s next for Kathy?

Well, unless she has absolutely no sense of self-preservation, she will cut a deal – and agree to testify against Keith Raniere and Clare Bronfman (She’ll probably also have to agree to testify in any subsequent NXIVM-related trials).

Making that choice would be an easy task for most people.

But Kathy is not most people.

Instead, she’s a woman who abandoned her young son – and moved more than 4,000 miles away to be with her Vanguard.

And she’s a 60-year wannabe ballerina who is still doing recitals with 10-year-old and 12-year-old-girls.

Hopefully, her two attorneys can convince her to make her first smart decision in almost 20-years – and get on with her life.

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The prosecution is probably anxious to get a plea deal worked out with Kathy – and remove her as a defendant in the case.

That will allow them to concentrate all their firepower on Raniere and Bronfman – and expose them for the horrid people they both are.

Having Kathy be part of the trial would be a distraction – both for the prosecution and the jury (Kind of like having a little puppy wander onto the field in the middle of a football game).

Let’s hope the prosecution gives a deal that requires only a short amount of prison time.

K.R. Claviger