The US Department of Justice for the Eastern District of New York filed their sentencing memorandum today for the last of the six defendants in the NXIVM case, Kathy Russell.
The prosecution is recommending a sentence of six to 12 months for the former NXIVM bookkeeper.
Kathy Russell was known in NXIVM by her nickname, “Miss Kathy.” Russell pleaded guilty to one count of visa fraud.
The criminal conduct, according to the memo, was that:
“In 2014, [Russell] presented false documents to the United States Consulate in Mexico in connection with a NAFTA professional (TN) visa on behalf of Loreta Garza, a citizen of Mexico.”
A TN visa, the prosecution explained, enables Canadians and Mexicans to enter the United States to engage in professional business activities on a temporary basis. To obtain a TN visa, a prospective employer must provide a letter of employment detailing the professional capacity in which the individual will work in the United States and their compensation.
Russell, as Garza’s prospective employer, signed a three-page letter addressed to the United States consulate that stated that Garza was a management consultant that Nxivm hired to “analyze current marketing and sales activities… interpret strategic research and competitive intelligence… advise on direction, strategies, and promotional activities to drive product, customer growth, and quality.”
She did nothing of the sort, of course.
Russell’s letter stated that Garza’s “extensive experience in … marketing strategies for the Mexican market, in addition to her familiarity with our professional [NXIVM] development programs, makes her an ideal candidate for this temporary consulting position.”
Garza was a longtime, low-paid NXIVM employee. Before that, she was Nancy Salzman’s maid and personal gopher.
Russell was certainly aware, as she herself confessed, that Garza was not going to be employed as a consultant for NXIVM but would work for a Nxivm-based entity, Rainbow Cultural Garden, LLC (“RCG”), a nanny service for affluent NXIVM members.
Russell also knew that Garza would not be getting anywhere near the salary she claimed. In fact, Garza used the amounts paid to her to pay RCG employees, who did not report their income.
In other words, Miss Kathy lied.
Crimes Not Proven Can Be Used Against Miss Kathy
Apart from the crime of conviction, the prosecution alleged her participation in other “criminal schemes” in NXIVM.
Title 18, United States Code, Section 3661 permits a judge to consider any information about the defendant, none of which need be proven to anyone’s satisfaction except the judge in determining her sentence.
The section reads: “No limitation shall be placed on the information concerning the background, character, and conduct of a person convicted of an offense which a court of the United States may receive and consider for the purpose of imposing an appropriate sentence.”
The only limitation a judge has in sentencing a defendant is that he may not go beyond the maximum sentence for the actual crimes of conviction. In Russell’s case, she could get up to 10 years.
Sentencing Guidelines Are Only Guidelines
Citing Gall v. United States, 552 U.S. 38, 49 (2007) the prosecution quoted, “a district court should begin all sentencing proceedings by correctly calculating the applicable Guidelines range…. the Guidelines should be the starting point and the initial benchmark.”
The US Probation Department did a calculation of the Sentencing Guidelines in Miss Kathy’s case.
Here is how they calculated:
- Her felony comes with 11 points.
- Because she committed it not for her own personal profit [she did it for Raniere], three points were subtracted.
- the visa was used to facilitate commission of a felony, so four points were added.
- She pleaded guilty, meaning she accepted responsibility; so she got two points knocked off.
Her total score is 10. Since she has no prior criminal history, the Guidelines range is 6 to 12 months.
Other Alleged Crimes of Kathy Russell
Helping Daniela Illegally Cross the Border
According to the testimony of Daniela at the trial of Raniere, in 2004, Russell provided the 19-year-old Mexican native with a false sheriff’s card using the identity of the late “Lisa Chenoa.” Daniela impersonated the dead woman at the border crossing at Niagara Falls.
After making it safely across Russell drove Daniela to the Nxivm community in Clifton Park, New York.
Neither Daniela nor Russell was charged with this offense.
Though it is not yet a federal crime to remind someone of past favors in order to persuade them to do a future favor and join a threesome, the prosecution reminded the judge that, once again, according to Daniela, Russell inveigled her to join a threesome with Raniere and herself, reminding her of how she risked her neck to help her get back to the USA.
Daniela testified that she felt she “owed” Russell the favor and so consented.
Helping Daniela Hack Into Computer
Russell also allegedly participated in a scheme to install keylogging software on the computer of James Loperfido, an accountant who had worked for Joseph O’Hara, an attorney who had previously done work for Nxivm.
Russell invited Loperfido to Nxivm’s offices and distracted him as Daniela installed the keylogging software on his computer.
Neither Daniela nor Russell was charged with this crime.
Faking it for Adrian
In approximately 2015, Russell participated in a scheme in which Adrian sought and illegally obtained an L1 visa application based on the claim that he was employed by Sagitta LLC, a company based in Clifton Park, New York, purportedly affiliated with Adrian’s father’s rock-drilling company in Mexico.
Adrian actually worked in video production for Moving Pixels, a company owned by Clare Bronfman. He paid rent to Nancy Salzman.
As part of the scheme, Russell, Bronfman, and Salzman arranged for Adrian to be paid through Sagitta LLC for work performed for Moving Pixels. Adrian submitted false Sagitta LLC invoices and paystubs as part of the scheme.
Russell, Adrian, Bronfman and Salzman were not charged with this crime.
Getting an Apartment for Camila
Though it is likely not illegal, the prosecution mentions Russell’s role in renting the townhouse Camila resided in.
In 2011, when Camila was 21, Russell leased 120 Victory Way, a property in Clifton Park, New York, under the assumed name Kathleen O’Sullivan.
Russell told the landlord a fictitious story—that “she had received a lot of money after her husband died” and would pay the rent upfront in cash and in full, which she did.
For the next seven years, until Raniere was arrested and Camila left for Mexico, Russell leased the property. It is not known where the money came from, but the property was used to house Camila, who had a secret sexual relationship with Raniere.
The prosecution admits they do not know if Russell was aware of the relationship between Camila and Raniere, who is 30 years her senior.
Concluding Thoughts of the Government
The prosecution notes that “for years, the defendant facilitated Keith Raniere’s criminal conduct and furthered his schemes. She was willing to undertake nearly any task assigned to her, from transporting a teenager across the Canadian border with a false identification card to defrauding United States immigration authorities by signing and presenting false documents in support of a visa application.
“The defendant was not the most culpable member of the criminal enterprise charged in this case, but her willingness to obey Raniere’s directives without question caused real and significant harm to others.”
Will She Repudiate Vanguard?
This question may make all the difference in whether Miss Kathy goes to prison and for how long.
Will she denounce Keith Raniere?
Russell was the last co-defendant to plead guilty. The Probation Department’s Presentencing report does not indicate, according to the prosecution, whether Russell continues to support and remain loyal to Raniere.
The prosecution is blunt: Loyalty to Raniere and Nxivm is the litmus test of incarceration.
The prosecution writes, “As the need for specific and general deterrence is of particular concern in this case, the government respectfully submits that the defendant’s efforts at rehabilitation and expressions of remorse,[i.e. repudiation of Raniere] if any, warrant significant consideration by the Court at the sentencing hearing.”
Prosecution Wants Her in the Can for up to a Year
The prosecution wants Russell to spend some time in prison. They requested that the judge sentence her within the guidelines range.
They wrote, “The government respectfully submits that the nature and circumstances of the offense, as well as the need for deterrence, weighs in favor of a sentence of imprisonment” and “respectfully submits that a sentence within the applicable Guidelines range is sufficient, but no greater than necessary, to achieve the goals of sentencing in this case.”
It will be up to the judge and possibly Kathy to decide whether it is really necessary for a sixty-plus-year-old woman, who certainly poses no threat to society and could be easily monitored by probation, has to endure actual incarceration.
Kathy can reduce her chances of spending time in a cage by telling the judge in no uncertain terms that she was wrong to do the lying and fraudulent activities she was convicted of, and if she did do the other things mentioned that those too were wrong.
She will do even better if she tells the judge the devil, Raniere, made her do it.
Russell is scheduled to be sentenced on October 6th.