Kathy Russell Quits Nxivm – Now Knows Raniere Deceived Her!

Good news.

Kathy Russell has left Nxivm.

Sources close to Russell reached out to Frank Report to advise us that Russell is no longer in the thrall of the evil Keith Alan Raniere.

Hers is a very sad story with hopefully a decent ending.

Two sources close to the former Nxivm bookkeeper tell Frank Report that Kathy is definitely out of Nxivm and getting therapy.

One source said Frank Report had a hand in helping Kathy see that Raniere never had her best intentions at heart.

“Kathy has made the firm decision not to ever go back,” said one source. “She is absolutely not in contact with any Nxivm members. She is through and realizes she has been badly abused and deceived by Keith Raniere.”

Russell is living in Georgia with her sister and has left the Albany area where she lived for more than 15 years. She left Alaska in the early 2000s to come to Albany to be close to Raniere and the company he founded.

“Kathy is not infatuated with Keith any more and is now going to therapy to treat her relationship with Keith much like a battered woman psychiatric condition,” one source close to Russell said.

Kathy, both sources said, finally realized that Keith lied to her and that he told lies about other women so that the women were always at odds with each other.

“He kept a private chaos going on so that all the women were catty towards each other and were enemies,” said one source. “Finding this out after 15 years, that everything was a giant lie, was very traumatic for Kathy.”

Though a dancer herself, Kathy did not endorse the recent MDC dancers efforts outside the MDC prison where Raniere is being held awaiting sentencing and was “horrified” to see their shenanigans.

Kathy is awaiting sentencing for her conviction for visa fraud and is under home arrest, which allows her to be out during the day but requires her to be home at night.

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

Rather than retain her own attorney, Kathy utilized one paid for by Clare Bronfman – William Fanciullo, an Albany area attorney who once served as an assistant U.S. Attorney.

On April 30th, Fanciullo sent an email to the U.S. Attorney for EDNY to inform them he was representing Kathy. Within 15 minutes of receiving his email, prosecutors contacted Fanciullo offering to discuss Kathy’s scheduled appearance before the grand jury.

He declined that invitation.

When Fanciullo and Russell showed up, as scheduled, on May 10, 2018, the lead prosecutor, Moira Kim Penza, asked him if he had any questions – and offered to meet with him and Russell before Russell began her testimony.

He declined that invitation.

Kathy appeared before the grand jury with a scrap of paper in her hand bearing words she was to repeat whenever she chose to invoke her Fifth Amendment rights against self-incrimination.

Kathy decided to invoke the 5th when she was asked the first two questions:
(1) Was she paying for Fanciullo’s legal services?
(2) Had she recently destroyed any NXIVM-related documents?

For the next 1½ hours, Kathy was asked 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 topics that Kathy refused to answer were:
• 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;
• Whether she had ever heard of anybody being confined to a room for a long period of time;
• 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, prosecutors, along with FBI agents, met with her and Fanciullo and offered to meet pursuant to a “Proffer Agreement” which would have permitted Kathy to get immunity from any charges and, in return, testify truthfully about Keith.

Penza again offered to meet with Russell and Fanciullo pursuant to the “Proffer Agreement” – when she emailed an offer to Fanciullo on May 14, 2018 (A “Proffer Agreement” is a written agreement between federal prosecutors and individuals under criminal investigation that permits those individuals to give the government information about crimes with some assurances that they will be protected against prosecution).

Fanciullo wrote back to her on May 22, 2018, indicating that “Ms. Russell respectfully declines your proffer proposal” thereby sealing Kathy’s fate.

Russell was arrested on July 24, 2018, one day after the indictment against her was returned by the Grand Jury and nearly three months after she had been summoned to testify.

Fanciullo represented Russell at her initial appearances in the Northern and Eastern Districts of New York but was replaced on August 9, 2018 by Justine Harris.

Harris engaged in plea deal negotiations with AUSA Penza and other members of the prosecution team.

On Good Friday, April 19, 2019, Kathy pled guilty before Judge Nicholas Garaufis to a single felony count of visa fraud in that she “did knowingly and intentionally present an application, affidavit, and other document required by the immigration laws and regulations prescribed thereunder which contain one or more false statements”

Kathy said at her allocution: “I knew Miss [Loreta] Garza worked for Rainbow Cultural Gardens, but I submitted a letter on her behalf that intentionally omitted that fact. I also knew that Miss Garza was not keeping the full amount of the salary listed in that letter. The letter that I submitted was required to be filed by the immigration laws. I know what I did was wrong, and I’m very sorry for the trouble I have caused. I compromised my own principles and I will have to live with that for the rest of my life.”

The judge informed Kathy at her hearing that “I want to make sure you understand this, that by signing this agreement, you agree not to appeal or in any other way challenge the sentence that I impose if it is 18 months or less.  If I were to sentence you to more than 18 months in jail, and you believe there was a legal or other error in my doing that, you would then have the right to appeal your sentence to the United States Circuit Court of Appeals for the Second Circuit.”

He can sentence her to a lower or higher sentence than the estimate.

If Kathy gets sentenced to 18 months, [hopefully it was be less] and adding the three years her life has been on hold, and all the terrors that come with being prosecuted, it is still better than the 15 years she spent as Raniere’s slave and the likely 15 years or more she would have spent in Nxivm had this insane cult not been exposed and taken down.

One day soon she may be able to resume her life, get some kind of worthwhile employment, or retire and lead a quiet life free from the insanity and criminality of Nxivm.

It is hoped that the judge, knowing well the harm Raniere did to so many women, some of whom he had before him in court, will realize that Kathy was another of those victims and that she deserves leniency and mercy.

But for some very bad legal advice and some misguided loyalty – for she was lied to by Keith and Clare – she might have been called as a witness against Raniere, something that at least initially the prosecution considered.

Frank Parlato