Joe O’Hara Letter to Judge Garaufis: Asks For a Sentence of at Least 41 Months in Prison

Editor’s Note: This is the first of the letters concerning Nancy Salzman’s sentencing that Frank Report has been able to obtain (The EDNY prosecutors apparently submitted all such letters “under seal” to Judge Nicholas G. Garaufis). We encourage anyone else who has submitted such a letter to send a copy to Frank Parlato at frankparlato@gmail.com so that it can be published here.

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August 16, 2021

 

The Hon. Nicholas G. Garaufis

U.S. District Court Judge

United States Courthouse
Room 1426 S
225 Cadman Plaza East
Brooklyn, NY 11201

RE: Nancy Salzman

Dear Judge Garaufis:

I am writing to express my thoughts regarding the upcoming sentencing of Nancy Salzman, the co-leader of the NXIVM/ESP criminal enterprise – and the public face of its numerous business entities.

Summary Statement

As is detailed below in the section of this letter labeled “Detailed Statement,” I worked as a part-time consultant for NXIVM/ESP during the period from October 1, 2003 through December 31, 2004. In conjunction with this arrangement, my primary assignment was to identify – and, in some cases, to hire – various individuals and companies that could supply specific services that the organization was seeking: e.g., an outside accountant who was familiar with the types of accounting issues that were unique to inter-related companies; an attorney who had previous dealings with the office of the New York State Attorney General; a public relations firm that had been involved in helping companies overcome bad publicity; an attorney who had argued cases before the U.S. Supreme Court; etc.

When she pleaded guilty before your honor on March 13, 2019, Nancy totally misrepresented her role in NXIVM/ESP. Although she claimed that she “…agreed to join an enterprise comprised of people close to Keith Raniere”, she was, in fact, the co-founder of the company, functioned as its Chief Executive Officer throughout the 20-years she was associated with it, had detailed knowledge of all its activities and operations, and oversaw all of the people who worked there.

Throughout the time I served as a consultant to NXIVM/ESP, I met periodically with Nancy and Keith Raniere, the other co-founder of the company (Most of those meetings took place at Nancy’s house). In this regard, the vast majority of my NXIVM/ESP-related work assignments came directly from Nancy – and it was Nancy who would follow up as to the status of my assignments.

During the course of my work for NXIVM/ESP, I became aware of several operational improprieties – and reported them to Nancy. On each such occasion, Nancy would take extensive notes about whatever issue I had identified – and assure me that she would have the problem immediately rectified (As I later found out, no corrective action was ever taken regarding any of these matters).

In late November of 2004, I became aware that NXIVM/ESP was receiving illegally obtained information concerning Rick Ross, the founder and Executive Director of The Cult Education Institute. Upon learning about this situation, I immediately informed both Nancy and Keith that they needed to return all the illegally obtained information to the private investigation firm that had gathered it – and to cease all interactions with that firm. When they refused to do either of those things, I resigned from my part-time consultant position.

Because I quit working for NXIVM/ESP – and because they were apparently concerned that I might reveal some of the things I had learned about the company’s operations – Nancy and Keith launched a vicious campaign to destroy me both personally and professionally. That campaign – which went on for more than a decade – included multiple civil lawsuits as well as two instances where their false statements caused me to be investigated and criminally charged (Both of those criminal complaints were eventually dismissed but not before my reputation and my finances were ruined).

Although I have refrained from commenting about the sentencing of any of the other defendants in this matter, I feel compelled to speak out with respect to Nancy’s upcoming sentencing out of concern that her decision to accept a plea deal rather than stand trial – and the rather meager testimony that was provided regarding her role in NXIVM/ESP during Keith’s trial – might leave you with a less than complete picture of the pivotal role she played in the “success” of the company. In addition, I am also concerned that no matter how much information might be included in her Pre-Sentencing Report, it may still not be enough to fully inform you regarding the horrible things she did to people in order to promote – and to protect – NXIVM/ESP.

Detailed Statement

I first encountered Nancy in September 2003 when I agreed to meet with her and a mutual acquaintance to discuss some of the issues and problems that her company – which turned out to be NXIVM/ESP – was facing at the time. My initial impression of her was that she was an experienced and sophisticated businesswoman who was up-to-speed on every aspect of the company she was running. In the ensuing years, I would learn – much to my chagrin and personal demise – that she was also one of the most diabolical, mean-spirited and ruthless people I have ever encountered.

During my 15-month tenure as a part-time consultant to NXIVM/ESP, I became aware of several improprieties in its business operations. Whenever I pointed these out to Nancy, she would make a grand show of asking lots of questions and taking detailed notes – and then assuring me that whatever issue I had identified would be immediately rectified. As I would later learn, however, the various improprieties I found out about were merely a small portion of a very deep pit of criminality – and Nancy’s promises of rectifying matters were simply hollow words that were meant to mollify me.

In late 2004, I was inadvertently sent a copy of an investigatory report regarding Rick Ross, who was the defendant in a lawsuit that NXIVM/ESP had initiated against him before it hired me (This report had been prepared by Interfor, Inc., a private investigation firm based in New York City – and it contained detailed records and information concerning Mr. Ross’ bank accounts, credit card transactions, medical records, prescribed medications, and telephone calls). As soon as I saw the contents of that report, I informed Nancy and Keith that it contained illegally obtained information – and that they needed to return the report to Interfor, Inc. and terminate their relationship with the firm. When they refused to do either of those things, I resigned from my part-time consultant position.

Immediately after my resignation, Nancy contacted me – and suggested that we go to dinner “to talk things out”. Although I was somewhat reluctant to meet alone with her – in large part because of her earlier suggestions that she and I engage in a sexual relationship even though she knew I was engaged at the time – I agreed to do so in the hope that I could avoid the type of brutal and costly litigation that NXIVM/ESP had undertaken against Rick Ross.

When I reiterated that I would not come back to work for NXIVM/ESP under any circumstances, Nancy dropped all pretense of cordiality and professionalism – and informed me that I would regret that decision. At the conclusion of our dinner meeting, Nancy informed me that I would be contacted by Richard Mays, a former judge on the Arkansas Supreme Court who had become enthralled with the NXIVM/ESP teachings – and who was also serving as one of its many attorneys.

During a subsequent meeting with Mr. Mays, he counseled me to resume working for NXIVM/ESP. When I reiterated that I was not going to do that, he laughed and told me “Then you have just signed your own death warrant”.

As it turns out, Mr. Mays wasn’t that far off in his prediction. For while Nancy and Keith didn’t kill me, they certainly destroyed much of what I had accomplished, both personally and professionally, before I met them – and turned my life into a living hell.

First came the baseless but well-publicized civil lawsuit with all sorts of spurious allegations – which was soon followed by a criminal indictment they were able to have initiated because of their connections with Albany County District Attorney, P. David Soares. Although the one criminal charge in that indictment was immediately dismissed due to “insufficient evidence”, being indicted was devastating to my consulting firm – and forced me to step down as the President of the company that I had founded two decades earlier and that had enjoyed a great deal of success in the interim.

Even before the criminal complaint was dismissed, however, Nancy and Keith were pushing hard to have Soares add additional charges to it (They apparently felt that they would have better luck in getting me to settle the civil lawsuit if I was facing more than one charge in the criminal case). To help ensure that this happened, Nancy convinced Joe Bruno, the then-President of the New York State Senate, to call Soares – and encourage him to bring more criminal charges against me (At the time, Nancy was serving as Sen. Bruno’s personal counselor – and Clare and Sara Bronfman, the primary financiers of NXIVM/ESP, were allowing Sen. Bruno to use their personal jet for his travels).

After the criminal case was dismissed, the civil lawsuit continued – with an unfathomable number of filings, perjurious affidavits, and needless delays. Eventually, the massive legal expenses I incurred in defending myself – and the precipitous drop in my company’s revenues – forced both me and my company into bankruptcy.

Even that was not enough, however, for the vengeful duo of Nancy Salzman and Keith Raniere. Next up was a new civil lawsuit based on their baseless claim that I (and several others) had hacked into NXIVM/ESP’s website – and stolen some of the company’s “tech” and other confidential information. And when that civil lawsuit was dismissed after it was documented that Clare Bronfman had perjured herself in claiming that the alleged hacking had occurred within the applicable statute-of-limitations time period, Nancy and Keith went back to Albany County District Attorney Soares and had me – and two other individuals – indicted for those same alleged violations.

This latter criminal indictment was resolved only after Kristin Keeffe, a defector from NXIVM/ESP,  provided documentation that conclusively proved that Albany County never had any basis to bring any such charges because the server that hosted NXIVM’s website was never located in that jurisdiction – a fact that was known by Soares at the time the indictments were issued. In fact, as the New York State Police’s “Incident Report” concerning this matter clearly documents, it was David M. Rossi, the Chief Assistant District Attorney for Albany County, who first proposed that criminal computer trespass charges be brought in Albany County after both the Saratoga County District Attorney and the Office of the New York State Attorney General had declined to bring such charges.

While the above-cited incidents have severely impacted my life, I am actually more appalled at what I personally witnessed Nancy do to several women who had battled – or were then battling – breast cancer, a disease that also led to my own sister’s death more than twenty-five years ago. In each of those instances, Nancy berated the women by telling them that their breast cancer was “caused by low self-esteem” or because the women were “seeking attention” – and then encouraged them to take more of NXIVM/ESP’s training sessions to cure themselves. Those who sought appropriate treatments from oncologists were scorned and shunned by Nancy and the other high-ranking women in NXIVM/ESP.

I bring up Nancy’s preaching about breast cancer not only because I want the court to know just how deviant and perverted she is but also because I am aware that Nancy herself has become a victim of that dreaded disease – and am concerned that the court may be inclined to take that into consideration in sentencing her. In my opinion, the fact that Nancy was stricken with breast cancer is simply a strong indication that there is a power greater than all of us that often brings justice to the world – and that her illness should have no bearing whatsoever on how long she spends in federal prison.

I also want to reiterate some of the other issues that I think you should take into consideration in setting Nancy’s sentence regardless of whether they were included in her Pre-Sentence Report. These include the following:

• Even though her bail conditions forbade her from doing so, Nancy has continuously maintained contact with some of the key operatives from NXIVM/ESP – and even now is reportedly still generating a significant amount of income by providing counseling services and administering “Explorations of Meaning” (EMs) to her clients[1];

 

• Nancy helped to propagate Keith Raniere’s demented views on pedophilia by giving lectures suggesting that sex with a child was OK if the child considered it to be OK (At the Raniere trial, evidence was introduced wherein Nancy stated: “In other words, when you are talking to a 12- year-old does the 12-year-old understand the choice she is actually making – and that determines whether it is abuse or not.”);

 

• Nancy used EMs to extract highly sensitive information from several well-to-do individuals who took NXIVM/ESP training sessions – and then used that information as leverage in order to get those people to donate millions of dollars to support the company’s operations[2];

 

• Nancy began her lifelong career as a scammer long before she co-founded NXIVM/ESP as she billed the Medicaid program for “psychological counseling” services she has provided to eligible enrollees even though she lacked the proper credentials to provide such services (She did these billings through another person who was an eligible Medicaid provider – and who collected a kickback from Nancy for the use of his Medicaid billing credentials);

 

• Nancy falsely claimed to have a bachelor’s degree and a master’s degree even though her only post-high schooling consisted of a 2-year nursing program and an associate degree – and then used those fake educational credentials in order to be hired as a corporate trainer at companies such as American Express and ConEdison;

 

• At various times, Nancy has falsely claimed to be a “Psychiatric Nurse” and an “Oncologist Nurse” even though she never had the requisite training for either of those positions;

 

• Nancy also claimed to be a “Licensed Psychologist” practicing psychotherapy even though she has never held any such license – and was never qualified to provide such services;

 

• Nancy participated in the brazen attempt by one of NXIVM’s law firms, O’Connell & Aronowitz, to secure my bank records and other personal information – and to secure similar materials regarding U.S. Sen. Chuck Schumer, former New York State Attorney General and Governor Eliot Spitzer, and several U.S. District Court judges in the Northern District of New York[3];

 

• Nancy flaunted her power and wealth while she served as the public face of NXIVM/ESP – and insisted on keeping her untaxed $40,000/year “clothing allowance” even after she was informed by an outside accountant that she needed to cease accepting those funds or report them as taxable income;

 

• For her extravagant birthday parties – at least one of which reportedly cost $250,000 – Nancy would put together a list of high-end goods and expensive bottles of wine that she wanted to receive as birthday presents (Even low-ranking members of NXIVM/ESP who earned little or no income from their work for the cult were expected to “honor” Nancy with at least one such gift);

 

• Nancy was involved in the plan to have several of NXIVM/ESP’s “enemies” – including me – arrested and prosecuted in Mexico (To this day, I have been warned by federal officials not to travel to Mexico because the status of the arrest warrant that was issued against me there is still unclear);

 

• Nancy was also involved in other fraudulent immigration-related activities that were designed to help several other illegal immigrants move to the U.S. under various programs (This involved the creation of falsified documents that were used to provide the requisite documentation that was required for these individuals to qualify for such programs);

 

• Nancy routinely had members of NXIVM/ESP assigned to do personal chores for her without ever compensating them for their work (I personally observed Kathy Russell weeding Nancy’s luxurious garden on a day when the temperature was well above 90 degrees – and Loretta Garza returning from a trip to pick up several of Nancy’s designer outfits from the local dry cleaner);

 

• Nancy stored much of the NXIVM/ESP cult’s unreported income in her home (Although that stash reportedly exceeded $2 million at one point in time, only $520,000 of it was recovered when the FBI agents raided her home on March 27, 2018[4]);

 

• Nancy was fully aware of the various “accounting strategies” that were used to allow NXIVM/ESP and its numerous affiliated companies from ever paying any income taxes – and refused to cease using these “accounting strategies” even after she was informed that they were illegal [5];

 

• Nancy oversaw NXIVM/ESP’s money-laundering operations – and personally delivered large sums of cash to intermediaries not associated with the company, thereby allowing it to evade detection by federal and state tax authorities;

 

• Nancy personally recruited several individuals to serve as “mules” for cash that was being smuggled into the U.S. from the cult’s operations in Mexico and Canada;

 

• Nancy was the person within NXIVM/ESP who was primarily responsible for structuring various financial transactions in order to avoid the reporting of the company’s transfer of funds per the applicable federal guidelines;

 

• Nancy was the one who signed the requisite paperwork to create the numerous shell companies that were used to hide NXIVM/ESP’s assets;

 

• Nancy convinced several low-ranking members of NXIVM/ESP to be the signatories on bank accounts that, thereafter, she controlled;

 

• Nancy, together with Keith Raniere, designed – and recruited participants for – a variety of pseudo-scientific, unlawful and extremely harmful experiments that purported to prove how effective the NXIVM/ESP “tech” was in curing such maladies as Tourette’s Syndrome, Obsessive-Compulsive Disorder, and breast cancer; and

 

• Nancy oversaw the illegal “bundling” operations via which NXIVM/ESP’s members were instructed to make political donations for which they were later reimbursed in cash – and it was Nancy who usually delivered these illegal donations to the political candidates who received them.

 

In sum, Nancy was aware of – and participated in – most of the criminal and extralegal activities of NXIVM/ESP. She most certainly was not – as she will likely claim – simply another unwitting woman who was deceived by Keith Raniere.

Without Nancy at the helm, NXIVM/ESP would never have achieved as much “success” as it did. Unfortunately, most of that “success” translated into devastating losses and interminable pain for people like me who were deemed to be “enemies” of the cult.

Nancy exalted herself with her make-believe title of Prefect – and used her position within NXIVM/ESP to directly harm more people than Keith Raniere. Indeed, I believe that the entire DOS debacle would never have happened had its victims not been mentally prepped by Nancy for the fate that awaited them in that heinous offshoot of NXIVM/ESP.

I would be remiss if I did not inform the court that I was previously incarcerated for 28 months at the Metropolitan Detention Center (MDC) after I pleaded guilty to one count of conspiracy to commit mail fraud. And while Nancy’s attorneys and supporters will undoubtedly point to my prior incarceration as a reason why you should give little consideration to my comments and opinions regarding Nancy’s sentencing, I believe that experience actually provides me with more credibility and perspective.

While I was incarcerated, I met hundreds of prisoners who had been sentenced for a wide range of crimes – and whose sentences ranged from 6-months to 60-years. And as I helped dozens of them prepare to take the General Educational Development (GED) exam so that they could obtain their high school diplomas, I often had the opportunity to discuss the details that led to them being incarcerated.

Unlike many of the inmates that I met, Nancy did not have to turn to crime in order to overcome the discouraging circumstances into which she had been born. On the contrary, she was born into a fairly well-to-do family and certainly never had to worry whether there would be anything to eat for supper – and/or where she would be sleeping – on a given night.

When Nancy teamed up with Keith Raniere, she became as ruthless and predatory as a shark. As long as she got her fancy clothes, her fancy car, and her fancy gifts, she was willing to do anything.

Perjure herself in affidavits? No problem.

Gather extremely personal information from people she was supposedly counseling – and then use that information as leverage against them to coerce them into taking more NXIVM/ESP training sessions and/or donating money to the organization? No problem.

Psychologically destroy people who had serious mental issues? No problem.

Violate a host of immigration laws so that she could have free maids and servants to do her bidding? No problem.

Promote opinions that she knew were morally and legally wrong in order to support Keith’s interest in getting others to adopt those opinions: e.g., that women often enjoyed being raped; etc.? No problem.

Work to destroy anyone that was perceived as an “enemy” of the NXIVM/ESP cult? No problem.

Do anything that Keith Raniere told her to do as long as she got to keep being paid an exorbitant salary, driving a fancy car, living in a mansion, and having a $40,000/year untaxed clothing allowance? No problem.

Please, your Honor, do not let this poor excuse for a person and a mother who has destroyed so many lives – and who has, insofar as I know, never apologized to anyone for her numerous misdeeds – escape the punishment she so richly deserves.

Please sentence her to at least 41-months in federal prison – and 3-years of post-release supervision. And please award appropriate restitution to anyone who comes forward with valid claims against her.

The sentence that I suggested will never balance all the harm that Nancy has done to others – but it will be a start. And it will send a cautionary message to anyone else who would do the types of things that Nancy has done to ruin the lives of others so that they could live a life of unearned luxury.

Sincerely,

Joseph J. O’Hara

PS/Although I never practiced law as a full-time career, I did graduate from Cornell Law School – and was a member of the District of Columbia bar for almost thirty years. During that time, I did pro bono legal work for a variety of charitable organizations – and I currently serve on the Board of Directors of several organizations that are focused on helping those who have been incarcerated to reintegrate into their communities and to avoid reincarceration.

In my experience, many of those who end up in prison learn from that experience – and go on to become productive and contributing members of society. Sadly, I do not see that being the case for Nancy Salzman – who, in my opinion, was a grifter and a fraud before she met Keith Raniere and who simply improved her techniques.

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[1] Hopefully, information about Nancy’s failure to abide by her bail conditions has been documented in her Pre-Sentencing Report. If not, then I believe Nancy should be questioned, under oath, about her flagrant disregard of her bail conditions.

[2] Nancy reportedly used this technique to convince people such as Barbara Bouchey, Michael Sutton, Clare Bronfman and Sara Bronfman to provide her with more than $100-million dollars to NXIVM/ESP’s various activities and Keith Raniere’s capricious investment schemes.

[3] This was one of the two predicate acts that were enumerated when Nancy Pleaded guilty to one count of Racketeering. Had Nancy gone to trial in the Eastern District of New York case – or, better yet, had she ever been charged with all the crimes she committed in the Northern District of New York – this would have been a much more exhaustive list.

[4] Insofar as I know, Nancy has never been questioned as to the whereabouts of the “missing” $1.5 million. In my opinion, I think this is another topic that Nancy should be questioned about, under oath, at her sentencing hearing.

[5] The essence of these “accounting strategies” was to keep moving the funds around among the various companies so that none of them ever had a taxable profit at the end of its taxable year. Even after I personally explained to Nancy that what NXIVM/ESP was doing constituted tax fraud, she continued to utilize these “accounting strategies” to avoid paying any corporate income taxes.