Consumers’ Buyline – A Revisionist View by Raniere’s Attorneys – ‘Keith Was a Victim’ of Walmart

Lawyers for Keith Alan Raniere have submitted to Judge Nicholas G. Garaufis an 86-page sentencing memorandum on behalf of their client.

They seek to persuade the judge to sentence Raniere to a sentence of 15 years, the minimum required by federal law for Raniere’s conviction on sex trafficking charges.

In an earlier last post, we spoke about how his lawyers described Raniere’s youth. In this next post in our series, his lawyers tell the tale of his Consumers’ Buyline, a business that went belly up and almost got Keith indicted back in the 1990s.

Here are the first two parts in our series:

Raniere Attorneys Memo to Judge Seeks 15 Years in Prison Instead of Life: Raniere ‘Maintains His Innocence; Stands by ESP, NXIVM and DOS’ 

Raniere’s Childhood as Told By His Lawyers — It’s So Sad It Will Make You Cry

Let us quote again from the memorandum. The [red parenthetical remarks] are from Nancy Durkin, who worked with Raniere during the time he ran Consumers’ Buyline.  My comments are in [brackets and bold].

Marc Agnifilo [l] and Paul DerOhanessian [r]

Raniere’s lead attorneys, Marc Agnifilo [l] and Paul DerOhanessian [r]

By Marc Agnifilo and Paul DerOhannesian II

Consumers Buyline

In 1990, Raniere started a business called Consumers’ Buyline, which sold groceries and consumer goods at a discount to people who became members of the organization. (Nope.  The company actually sold nothing other than overpriced memberships, which afforded one the opportunity to then save money on consumer goods, through a real organization called Purchase Power, Inc.) 

[Purchase Power was the company that actually offered the discounts and arranged any savings. Keith did not own Purchase Power. All he did was make an arrangement to use Purchase Power’s agreements with vendors. All Keith’s company did was sell memberships that gave access to Purchase Power and Consumers’ Buyline {CBI} charged a high markup for essentially being a middleman. ]

The premise was that through membership in the entity, a person could acquire the buying power of hundreds or thousands of people and command better prices for household items. In addition, the company served as a sort of agent for the consumer, putting the consumer more on par with the large corporation selling the goods.

(CBI served as nothing but a membership sales group. The ideas and structure behind Purchase Power, which was real, were those of its owner and creator, who started the company in 1964, when Keith was 4 years old.  CBI created NOTHING.)

The idea, in a nutshell, was that whenever a consumer enters a Walmart or a Target, the consumer is at the mercy of a large corporation’s pricing structure as well as other protocols designed to benefit the corporation at the expense of the consumer.

Consumers’ Buyline was created to level the playing field, giving consumers greater leverage – which, in turn, led to lower prices and the availability of consumer goods that better met their needs. 

(Nope.  CBI was created to sell memberships.  As long as a person wanted to pay $250 a year for that “opportunity.”)

[This is true. Raniere or CBI made no efforts to lower the prices of anything. They merely sold $250 memberships and paid Purchase Power about $35 to allow CBI members to use Purchase Power’s buying power. If the same people had joined Purchase Power directly, they would have saved almost $200. In fairness to Raniere and his selling ability – by making the sales of membership a multilevel marketing scheme, he wound up bringing a lot of business to Purchase Power that it might not otherwise have had. But CBI was 100 percent an MLM. It had no products. It sold memberships at a high mark up to support the pyramid scheme.]

Keith may not have invented the internet but he did invent Consumers' Buyline. And wearing fashionable sweaters.

Keith Raniere founded Consumers’ Buyline. Here he is presenting to his affiliate members how they will make a fortune with him, the smartest man in the world. He must have been persuasive in that very smart sweater.

However, by standing up to some of the largest corporations in the United States, Consumers’ Buyline ruffled feathers and disrupted the hold these corporations had on the American consumer.

This resulted in investigations by several government entities, the expense of which served to strain the company economically. 

(Laughable.  CBI’s membership level never reached a level to threaten the Walmarts of the world.  If so, you would have heard of it. Betcha didn’t.  The state investigations were actually into the company’s questionable multi-level marketing practices, involving membership sales and promises of commissions on those sales by gullible “Affiliates.”)

[This last statement by Raniere’s attorneys is surprising – insofar as they put their names on this. This is bullshit that Walmart etc. were threatened by CBI and so they got the Attorneys General of numerous states to go after CBI.  What’s most surprising is they assert this without evidence. Not a document, not even an estimate of CBI’s total buying power that would show that Raniere’s company conceivably could have put a dent into the big retailers. This kind of unsubstantiated assertion might, I think, have the opposite effect on the judge, who will see it for what it is – a dishonest, self-serving claim to make something bad Raniere did – in a lifetime of evil – look as if it were something good and he was a poor victim.] 

Before he became Vanguard, Keith Raniere started a business called Consumers' Buyline. It failed and went out of business.

Before he became Vanguard, Keith Raniere started a business called Consumers’ Buyline. It failed and went out of business. His lawyers present a theory on why that happened.

Significantly, however, there has never been a factual finding by any court that the company engaged in fraudulent conduct of any sort.  Nonetheless, due to the investigations, the company was being run out of business by the large corporations whose unfettered control over the consumer was being challenged. 

(No, it was run out of business by the states seeking to clamp down on illegal pyramid schemes.)

On September 3, 1996, Raniere, Karen Unterreiner and Pamela Cafritz, each of whom had executive positions with the company, entered into a Consent Order and Judgment with the New York State Attorney General (I think his Dad,  James Raniere signed it too.  Embarrassing…), stipulating that the representatives of Consumers’ Buyline deny improper conduct and that no finding had been made of any such conduct, and that Consumers’ Buyline will pay the Attorney General $40,000 to resolve all claims.

[It also stated that they would stop operating CBI and that Raniere would never engage in illegal MLM or pyramid businesses in New York state ever again in his lifetime.]  

Similar settlements were made with other states. However, not only has there never been a finding of fraud, on those occasions where a court was asked to pass on the merits, there has never been a factual finding adverse to the company. 

(There has never been, at least to my knowledge, satisfaction of the $40K fine Raniere agreed to pay – unless somebody else later paid it on his behalf.)

[Actually Raniere never paid the fine. He went out of business and stiffed the state of NY, then years later when he wanted someone indicted and wanted help from law enforcement, he got someone else to pay the fine.  He not only stiffed New York but he stiffed thousands of affiliates out of their commission.]

To this extent, where the Pre-Sentence Investigation Report falsely states that Consumers’ Buyline was shut down because of fraud, this is simply not true. There was never a finding of fraud nor an admission by anyone associated with the company that a fraud or other crime took place. Rather, the company agreed to modest fines and to cease conducting business in a number of states as a way of ending expensive civil litigation. Ultimately, the company sold its book of business, paid its creditors and was administratively dissolved.  

(Paid its creditors?  That would be interesting if true.  Also, “book of business” implies a commission driven enterprise, such as insurance.)

[By saying CBI was “administratively dissolved” means that the NYS Secretary of State dissolved the business due to CBI’s failure to comply with its obligations of the business entity statute. In short, Raniere just walked away from CBI leaving everyone who was owed money holding the bag. To present this ugly story as “Raniere is a victim” is just not going to play well with the judge.]

Keith Raniere hired actor Eddie Albert to be a spokesperson for Consumers;' Buyline.

The little rascal with Eddie Albert. He hired the aging actor to introduce him and call him a genius and to bring some trustworthiness to Raniere’s infomercial about CBI.

Keith greets Eddie Albert. Curiously, they only appear on screen together for about 20 seconds.

Keith Raniere with Eddie Albert doing an infomercial for Consumers' Buyline.

Keith Raniere during his Consumers' Buyline days.

When we think about the CBI period of Keith Raniere’s life, we tend to think about state attorneys general shutting him down, about the scam itself and how he stiffed so many people who trusted him out of money.

But we should not forget another person who trusted Keith that was victimized – but not out of money.

Rhiannon was 12 when Keith stole her virginity.

Rhiannon

Consumers’ Buyline’s offices in Clifton Park. One thing Raniere’s attorneys did not mention is that Raniere brought Rhiannon to the building and had dozens of sexual encounters with her when she was 12- 13 years old.

Keith Raniere teaches that a woman who is integrated needs only 500 calories per day. If a woman needs more than 800 she has defiance issues and is not integrated.

Consumers’ Buyline’s offices were on the second floor. Keith Raniere invited the 12-year-old Rhiannon to help with the work at Consumers’ Buyline – after hours. Once in the elevator, Raniere had sex with the girl.

Rhiannon

Rhiannon was 12, when Keith persuaded her to have sex with him. She later said she felt her childhood was stolen.

Here is the police report Rhiannon signed. Note that she said she had "sexual intercourse with a man named Keith Raniere. This occurred when I was approximately 12-13 years old and occurred either at Keith's townhouse at 3 Flintlock Lanes, Clifton Ny or his business located at Rome Plaza Clifton Park, NY"

Here is the police report Rhiannon signed. Note that she said she had “sexual intercourse with a man named Keith Raniere. This occurred when I was approximately 12-13 years old and occurred either at Keith’s townhouse at 3 Flintlock Lanes, Clifton Ny or his business located at Rome Plaza Clifton Park, NY”

Let us remember Rhiannon and other young girls, girls like Gina Hutchinson and her friend Gina, when we think of CBI.

No, Keith was not the victim of the CBI saga.