Part 3 Where Is the Collateral? Judge Orders Raniere to Return Collateral But Not Until Appeal Is Done – Which Could Take Years

This is Part #3 of “Where Is the Collateral?”

Part #1: Where Is the Collateral? Frank Report Hunting Down DOS Collateral – Some Was Destroyed in 2017 – Most Was Not

Part 2 Where Is the Collateral? Raniere Claims He Doesn’t Know Where It Is — Neither Does the Government

Collateral is the thing that sunk Keith Alan Raniere.

Had he not demanded collateral and had he not had women branded on their groin with his initials (without bothering to let them know it was his initials), Raniere most likely would be walking free with one of his slaves in Clifton Park right now, prepping her for the boudoir, or with one or two of them at his sex lair, perhaps soaking in his hot tub or photographing them lying naked on his loft bed, or in their own home nearby on their pillowtop mattress, and not at USP Tucson serving a 120 year sentence in a colony of about 1,000 male sex offenders.

In Part #2 of this series, we reported on the restitution hearing where Raniere was told he must pay some $3.5 million to 21 victims.

All told, Raniere did pretty well for himself. Twenty-one statutory victims is not a bad day’s work for a small-town grifter of any stripe. And even that considerable number was winnowed down mightily by the judge. Originally 100 individuals (75 women and 25 men) submitted claims as victims for restitution, seeking over $33 million from the man known to them as Vanguard.

Yes, Raniere was always a high roller (though somehow he always wound up losing) which is (and then again is not) what one would expect from the self-proclaimed smartest man in the world.

As for victims and their restitution, the US Deptartment of Justice recommended that the judge award about $6 million to 25 victims. Judge Nicholas G. Garaufis decided to narrow it down to 21 victims who should, he ruled, get collectively about $3.5 million.

As far as I know, and in keeping with his super intelligence, Raniere has not paid a dime of it to anyone.

But, still, it was collateral that made most of the victims “victims.”

“The trial record establishes that all or virtually all lower-ranking DOS slaves were victims of a conspiracy to obtain forced labor and that many of them were also victims of sex trafficking conspiracy, ” Judge Nicholas G. Garaufis explained.

He said, “The Court finds that any lower-ranking DOS member or ‘slave,’ whose commitment to DOS was secured by collateral and who engaged in a sexual act at the behest of a DOS ‘master’ is a victim of the sex trafficking conspiracy offense….  any lower-ranking DOS slave whose commitment to DOS was secured by collateral and who performed uncompensated labor or services at the behest of a DOS master is a victim of the forced labor conspiracy offense.”

It was collateral that forced them to have sex with the beast and work for free for their various masters, the judge decided.

Because of the collateral, the judge ruled, Raniere “benefited from the expectation of DOS slaves’ constant availability….  the requirement that DOS slaves be perpetually available for their masters, and in some cases to Mr. Raniere, [which] facilitated the sex trafficking and forced labor conspiracies [and wire fraud conspiracy] by instilling in the victims a sense of subservience and a lack of agency that permeated every aspect and hour of their lives.”

Because of the collateral, they were forced to stay in DOS and consequently, the judge said he found Raniere “responsible for causing the full extent of DOS victims’ mental health care needs.”

And “Raniere has held a principal role in the causal process as the predominant inflictor of psychological injury.”

The judge also determined that Raniere got the collateral by hook and by crook.

The judge said, “lower-ranking DOS members were fraudulently induced to furnish property as ‘collateral,’ including, but not limited to, sexually explicit photographs or videos as a condition of their membership in DOS.”

As a consequence of it being fraudulently obtained, the judge demanded that Raniere return the collateral ruling “that all lower-ranking DOS members are statutorily entitled to return of their collateral.”

He ordered “Mr. Raniere to effectuate that return to the fullest extent practicable.”

When asked about the collateral, Raniere, of course, denied knowing anything about it.

He told Judge Garaufis, “I have never handled the collateral, do not know anything about it, do not have it.”

A legal argument then cropped up wherein Raniere’s attorney argued it would violate Raniere’s 5th Amendment right if he returned the collateral.

The judge agreed, though not eagerly, and stayed the order requiring Raniere to return the collateral until his appeal is finished.

This might take years.

Raniere is in the midst of an appeal. The government has not responded to his initial appeal and a supplemental brief may yet come from the Vanguard. After the government responds and Raniere replies, it may take a year or more for the Court of Appeals to decide on this matter.

If he fails, he may appeal to the US Supreme Court. And if he wins either at the Second Circuit or the Supreme Court, he very likely will get a new trial. That also might take years.

Judge Garaufis explained, “Mr. Raniere’s counsel raises the concern that requiring Mr. Raniere to locate and disgorge the victims’ collateral may violate his Fifth Amendment right against self-incrimination in the event that he prevails in his appeal and gains a retrial.”

“The Second Circuit has previously rejected the argument that an order directing a defendant to return ill-gotten property to victims, as required by the MVRA, violates the defendant’s Fifth Amendment rights.” See United States v. Bryser, 954 F.2d 79, 89, Second Circuit 1992.

“Even so, in an abundance of caution, the Court stays Mr. Raniere’s obligation to effectuate the return of the victims’ collateral until the exhaustion of his appellate rights on direct appeal. Within 60 days of the exhaustion of such rights, he must effectuate the return of all original and duplicate copies of DOS victims’ collateral or, to whatever extent such collateral has not yet been returned, file a letter with this Court establishing that he has made all reasonable efforts to effectuate the return of the collateral and setting forth a detailed plan and timeline for returning all outstanding collateral to the fullest extent practicable.”

In the meantime, the judge told Raniere to keep his mouth shut.

From the transcript:

THE COURT:..  I would…  counsel him [Raniere] not to speak on… whether he actually controls any of the collateral…

MR. FERNICH [Raniere’s lawyer]: I would echo that advice, for what it’s worth.

THE DEFENDANT [Raniere]: Okay.

Per Judge Garaufis’ order, Raniere must help get the return of “all the original and duplicate copies of their [lower ranking DOS slaves’] collateral” within 60 days after his appeal has been decided (If he wins the appeal and gets a new trial, the judge’s order will be moot).

But he does not need to return it during the stay until his appeal is done.

He does, however (in the event he has control of it) have to preserve it and not try to destroy it.

The judge said, “while such obligation [to return the collateral] is stayed, [Raniere must] preserve any original or duplicate copies of collateral that are within his dominion or control.”

In short, Raniere has to preserve the collateral until his appeals are done. Which might take years.

See how smart he is?  Not only did he not pay a dime to any of the victims, even the judge couldn’t force him to return the collateral, which he knows nothing about anyway.  Raniere, of course, says that collateral was only devised to make women more empowered.

Another victory for old Vanguard, and, of course, I hate to say it again, but this is stellar proof of it being wholly appropriate in this instance: Viva Executive Success!

Stay tuned for Part #4.

Frank Parlato