This is Part #2 of “Where Is the Collateral?”
Collateral in the sense it is used in this article is that which was collected by slave masters of DOS, the sorority created by Keith Raniere.
Collateral included sexually explicit photographs; videos made to look candid in which slaves told damning stories (true or untrue) about themselves, close friends and/or family members; and letters making damaging accusations (true or untrue) against friends and family members.
According to the New York Times, “The women were required to hand over ‘collateral’ — embarrassing and incriminating information, including nude photographs — that would be publicly released if they disclosed the existence of D.O.S.”
Collateral was collected in order to have the ability to destroy five areas of a woman’s life:
Prior to Raniere’s arrest, a DOS slave, Jessica Joan, stole collateral from Allison Mack’s computer. That collateral included nude photos of Mack’s slaves and a confession of a slave that she hated a family member.
Mack was careless about safeguarding collateral. She stored it in a Dropbox accessible from her computer. Joan was able to download it.
She testified that she did this to protect herself from the threat of blackmail after she decided not to perform a “seduction assignment” – which required her to seduce Raniere into taking a nude photo of her.
Joan gave the collateral to Mark Vicente who sent it to me. I gave it, through an attorney, to the US Department of Justice.
Allison Mack’s Collateral
On January 18, 2018, the Eastern District of New York US Magistrate Judge Cheryl Pollak signed a search warrant for the FBI to obtain an email account of Raniere’s [firstname.lastname@example.org.] . On February 1, 2018, Yahoo! produced the information.
One of these emails was written to Raniere on August 10, 2015 by Allison Mack where she provided her plans for her own collateral. The email subject was “vow 3.” It included an attached letter where Mack used the terms “slave” and ”master” and pledged her “full and complete life” to Raniere.
The letter identified “collateral” to “cement” the vow. Mack’s offered:
(1) a letter regarding Mack’s mother and father that would “destroy their character.”
(2) a contract that transferred custody of any children birthed by Mack to Raniere, if Mack broke her commitment to Raniere.
(3) a contract that transferred ownership of Mack’s home if the commitment to Raniere was broken.
(4) a letter addressed to social services alleging abuse to Mack‘s nephews.
This was in addition to nude photographs Mack provided for her master.
Government Said It Had a Lead on Collateral but Never Followed Through
Keith Raniere was convicted on June 19, 2019. On October 19, 2020, Raniere filed a Rule 33 motion seeking a new trial, claiming “newly discovered evidence” relating to the government’s alleged intimidation of Hatchette and Nicki Clyne.
In their response the government wrote:
“As trial preparation began,  the government received information that Clyne was in control of DOS-related materials, including collateral and other records, which were in the possession of her attorney.
“Specifically, the government learned that after the existence of DOS became known within the Nxivm community, Clyne instructed DOS ‘slaves,’ including Michele Hatchette and India [Oxenberg], to transfer DOS-related digital materials, including collateral, to hard drives that Clyne provided. After the materials were saved to the hard drives, Clyne instructed the group of DOS ‘slaves’ to delete the DOS materials from their own computers.
“Months later, Clyne told India that she had given the hard drives and other DOS-related materials to Clyne’s attorney.
“As a result, on April 9, 2019, the government served Clyne, through counsel, with a grand jury subpoena seeking ‘any and all records in your possession, custody or control related to “DOS,” “the Vow,” or “the Sorority,” including but not limited to
“(1) audio or video recordings of Keith Raniere and DOS ‘slaves’;
“(2) records identifying current or former members of DOS;
“(3) ‘collateral’ provided by any current or former member of DOS; and
“(4) electronic devices containing such records.”
“An accompanying letter advised Clyne that she was a target of the grand jury’s investigation.
“Later that day, Mr. Sapone acknowledged receipt of the subpoena and sent an email to the government “confirm[ing] that if called to testify” before the grand jury, Clyne would invoke her Fifth Amendment right against self-incrimination.
“At the request of counsel, later that day, the government provided Mr. Sapone with a letter granting Clyne act-of-production immunity with respect to the production of the requested materials.
“The letter advised that, among other things: Nicole Clyne’s act of producing documents pursuant to the subpoena will be not used against her by the Office in any subsequent federal criminal proceeding, except that her act of producing those documents could be used against her in a prosecution for obstruction of justice if she intentionally takes any criminal actions with respect to the production (including, but not limited to, altering documents or intentionally withholding documents).
“In a letter dated April 10, 2019 and emailed to the government, Mr. Sapone stated:
“‘I have explained to Ms. Clyne her Constitutional rights and privileges as they relate to the subpoena. On the advice of counsel, if Ms. Clyne were compelled to appear before the grand jury to give testimony, she would respectfully assert her 5th Amendment privilege against compelled self-incrimination.’
“On April 15, 2019, Mr. Sapone sent a letter to the government stating that Clyne was ‘asserting her act of production privilege with respect to the documents and other materials sought by the April 9, 2019 grand jury subpoena’ and requested that the government seek formal act-of- production immunity from the Court.
“Mr. Sapone noted that he and Clyne were in the process of ‘collecting and logging documents and other materials responsive to the subpoena’ and that Clyne may seek to raise ‘additional potential 5th Amendment arguments’ in response to the subpoena. Ultimately, the government did not seek an order of statutory act-of-production immunity for Clyne and did not obtain the subpoenaed records.”
This is astonishing in itself. In 2019, the government claims it had information that Sapone had possession of some or all of the collateral. They had the power to subpoena it but never did subpoena it. How could that be?
It is now late 2021, and they have never made an effort to get the collateral from Sapone.
Probably because they know Sapone never had any collateral.
The government wrote, arguing against Raniere’s Rule 33 motion, “The government has not ‘press[ed]’ Mr. Sapone for these materials not because it used the subpoena to ‘instill’ a ‘sense of fear’ in Clyne… but because the government did not seek or obtain permission to petition the Court for statutory act-of-production immunity.”
The government has professed a keen desire to obtain the collateral.
The sum total of their evidence that Clyne’s attorney has the collateral comes from India, who was in danger of being indicted. She told the government that Nicki told her to collect the collateral. This is very likely true. But what happened to it, as we shall see, is that it did not go to Sapone.
The government had the opportunity to subpoena the collateral from Sapone if it truly believed that the collateral was in Clyne’s attorney’s possession and they truly wanted the collateral destroyed or returned to the victims.
Raniere Says He Knows Nothing About the Collateral
Keith Raniere was sentenced on October 27, 2020 to 120 years in prison. On July 20, 2021, a restitution hearing was held at the federal courthouse in Brooklyn. AUSA Tanya Hajjar appeared for the government. Marc Fernich and Jeff Lichtman appeared for the defendant, Raniere, who also appeared by videoconference.
Judge Nicholas G. Garaufis was presiding.
The hearing was held so that the judge could determine the sum of money each victim of Raniere was to receive. Most of the 21 victims were DOS members who had given collateral.
During the hearing, the issue of collateral loomed large.
It began with a discussion over whether the judge can order Raniere to return the collateral.
MS. HAJJAR: … With respect to…. the Defendant’s objection to your Honor’s ability to order the return of collateral… because such an order would violate the Defendant’s Fifth Amendment rights, the Government notes that the MVRA [Mandatory Restitution to Victims Act] explicitly provides that the Court may issue such an order…. [citing the USA v Mitchell] the Supreme Court concluded that that defendant retained her privilege against compelled self-incrimination, but the Court went on to conclude that where there can be no further incrimination – in other words, in cases in which the sentence has been fixed and the judgment of conviction has become final, such as this one – the [5th Amendment] privilege no longer attaches and there are no adverse consequences that can be visited upon the convicted person by reason of further testimony.
So, here, your Honor, the sentence has been fixed, the judgment of conviction is final. The Court is authorized by the relevant statute here to require Mr. Raniere to return or destroy collateral. And the Government submits that that’s appropriate.
THE COURT: Anything else?
MS. HAJJAR: No, your Honor.
THE COURT: Let me hear from the defense.
MR. FERNICH:… I’d suggest to the Court that my friend [Tanya Hajjar] is reading the [Mitchell] case right but misinterpreting the meaning of “finality,” which typically, in our field, is at the conclusion of direct appeal.
And that’s — the particular passage that my friend is referring to is 526 U.S. — it looks like at 326, and says that the possibility of incrimination exists in cases — it only disappears in cases in which the sentence has been fixed and the judgment of conviction has become final. Finality — and it cites to the Reina case in 1960, “finality” means at the conclusion of direct appellate proceedings to the U.S. Supreme Court…. my suggestion was as follows: To table this, this issue. And in the event that the conviction does become final, we could joint issue on that at that point….
I’ve not consulted with Mr. Raniere about this, but plainly the concern is, right, under the act of production issue, we have victim statements saying they don’t know where the collateral is, they don’t know its location, they don’t know its custody or control. I don’t believe the Government can establish that it’s a foregone conclusion that the Government knows who has custody or control or authenticity, or even the continued existence of this collateral.
So, there are active production implications here. And those implications could theoretically extend to other crimes, even beyond what’s been charged here, depending upon the disposition of the collateral.
So, under Hoffman, it’s a link in the chain, potentially. And my respectful proposal is that this particular issue, the issue of the identification, production, and disgorgement — there’s another word I put in the papers that I forgot, identifying the location, marshaling the assets, and telling the Government where they are, that this await the potential finality of the conviction.
THE COURT: Thank you very much. Before I proceed with reaching some conclusions here regarding restitution, is there anything, Mr. Raniere, that you want to say on the subject of the issue of mandatory restitution to the victims of the offenses for which you were found guilty by a jury?
RANIERE: I don’t understand enough of the law and the constraints to make an intelligent response to that. I would need to speak to my attorneys to understand that. I would like to make a note that I have never handled the collateral, do not know anything about it, do not have it. So, I’m not quite sure also the consequences of that.
MR. FERNICH: Judge, if he’s going to make statements like this, could we have an arrangement to consult with him before he continues? I don’t want him just extemporizing about this stuff on the record in a public court proceeding.
RANIERE: I’ll remain silent.
Stay tuned for Part #3.