Raniere Thwarted, Tried to Kill Payments to 21 Victims – DOJ Paying Anyway

Mr. Parlato.

I have seen that you never replied to my longer message about censorship.

I plead with you and implore you to kindly please address the things that I said in my longer text and thrill me with your acumen on these very important points. Please and thank you.

I look forward to hearing from you.

Ethicist Grandmaster Vanguard (EGV) is clearly a victim.

Give them the money

Fuck Raniere pay the victims they suffered enough already.

Vanguard keeps losing.

And it keeps bringing me joy.

Vanguard said: “He who has the most joy wins.”

Therefore, I keep winning.

Raniere’s desire to hurt people runs deep….

It’s good news they get paid. But I still think Sylvie gets too little money, because she was in DOS, got a seduction assignment (from Monica Duran I believe), was sexually assaulted by Keith (she testified in court about this).

So, it’s odd she gets a fraction of the sum paid out to, for example, Nicole, who had a similar experience. Even Jessica Joan gets more. Jessica got the seduction assignment but never had to endure Keith’s greasy fingers on her. I know Sylvie got restitution related to Clare’s sentencing, but still.

Bad going for Raniere and Tully. But things are much worse for others, as CalPERS shows, with a loss of $60 million in 2022.

____________________________________________________________________________________________________________

The California Public Employees' Retirement System, CalPERS, $442 billion pension fund has lost $60 billion in 2022.

_____________________________________________________________________________________________________________

CalPERS Announces Preliminary Net Investment Return of -6.1% for the 2021-22 Fiscal Year

July 20, 2022

Communications & Stakeholder Relations

Contact: Megan White, Information Officer

(916) 795-3991 – [email protected]

Challenging global public markets, strong private market returns lead to varied performance

SACRAMENTO, Calif. – Tumultuous global markets played a role in CalPERS’ first loss since the global financial crisis of 2009, as the System today announced a preliminary -6.1% net return on investments for the 12-month period that ended June 30, 2022. Assets stood at $440 billion at the end of the fiscal year.

“We’ve done a lot of work in recent years to plan and prepare for difficult conditions,” said CalPERS Chief Executive Officer Marcie Frost. “Despite the market conditions and their impact on our returns, we’re focused on long-term performance and our members can be confident that their retirement is safe and secure.”

Volatile global financial markets, geopolitical instability, domestic interest rate hikes, and inflation all have had an impact on public market returns. CalPERS’ investments in global public stocks returned -13.1%, while fixed income investments returned -14.5%. Public market investments make up roughly 79% of the CalPERS’ total fund. CalPERS’ private market investments fared much better, with private equity and real assets sectors returning 21.3% and 24.1%, respectively.

“This is a unique moment in the financial markets, and we’ve seen a deviation from some investing fundamentals,” said CalPERS Chief Investment Officer Nicole Musicco. “For instance, our traditional diversification strategies were less effective than expected, as we saw both public equity and fixed income assets fall in tandem. But despite a challenging year, we were able to outperform our total fund benchmark by 90 basis points and provide strong returns from our private market asset classes. These are bright spots that we can build on as we implement our new strategic asset allocation and increase our exposure to private market assets.”

Total fund annualized returns for the 5-year period ending June 30, 2022 stood at 6.7%, the 10-year period at 7.7%, the 20-year period at 6.9%, and 30-year period at 7.7%.

Asset Class Net Rate of Return Policy Benchmark

Total Fund -6.1% -7.0%

Public Equity -13.1% -13.2%

Fixed Income -14.5% -14.5%

Private Equity* 21.3% 8.3%

Real Assets* 24.1% 27.1%

Liquidity 0.3% 0.1%

* Private market asset valuations lag one quarter and are as of March 31, 2022.

[ … ]

https://www.calpers.ca.gov/page/newsroom/calpers-news/2022/calpers-preliminary-investment-return-2021-22

Almost $300K for co-conspirator #2, a DOS master herself. Seems on the level to me, certainly not anything that should be questioned or looked into…

It seems the court was unimpressed by this tale of “shocking FBI tampering”.

Nobody takes this bullshit tale seriously.

Not even Clare Bronfman, and she’s a Raniere supporter. Note that none of Raniere’s jailed co-conspirators want any part of this bullshit theory. It’s too crazy for even them.

A little face fun time with the Vanguard

https://www.instagram.com/p/CgW0pJ4lu1Q/?igshid=MDJmNzVkMjY=

How does the government get to use the Bronfman money to pay what Raniere owes?

Clare Bronfman is paying too much for her car insurance.

She must pay less. This is a DEMAND that Clare pay less for her car insurance.

Clare. Pay. Less. For. Your. Car. Insurance.

Knowing Raniere, the sharpest sting this poses isn't money, it is his being ignored. The fact that he is now irrelevant and that he gets ignored has to be tormenting him. Viva Executive Success!

Here we go again

https://nypost.com/2022/07/23/manhattan-cult-osg-bought-compound-upstate-uses-forced-labor/

Frank

Rainere deserves to get Zero in prison. He is NOT important and he deserves stale bread & water. He is a seducer, rapist & a killer.

That fact is flat. Rainere is a fat assed Killer who deserves to be behind bars and to die there –

Viva when all playmates in NXIVM go to jail & never come out.

These are the first 6 pages of a total of 32 pages of Memorandum and Order.

_____________________________________________________________

Case 1:18-cr-00204-NGG-VMS Document 1036 Filed 05/28/21 Page 1 of 32 PageID #: 19427

MEMORANDUM & ORDER

18-CR-204 (NGG)

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF NEW YORK

__________________________________________________________________________

UNITED STATES OF AMERICA,

-against-

KEITH RANIERE

Defendant.

__________________________________________________________________________

NICHOLAS G. GARAUFIS, United States District Judge.

On June 19, 2019, following a six-week trial, a jury convicted

Defendant Keith Raniere of racketeering, racketeering conspir-

acy, wire fraud conspiracy, forced labor conspiracy, sex

trafficking conspiracy, and two counts of sex trafficking. (Jury

Verdict (Dkt. 735).) On October 27, 2020, this court sentenced

Raniere principally to a 120-year term of imprisonment. (Stc’g

Mem. (Dkt. 966) at 18-19.) At that time, the court directed the

Government to submit any claims of restitution within 90 days.

(Id. at 20; Tr. of Oct. 27, 2020 Stc’g of Keith Raniere (“Stc’g Tr.”)

(Dkt. 1002) at 154.)

On January 27, 2021, the Government provided the court with

copies of the restitution requests it had received from putative

victims, a letter setting forth its proposed methodology for eval-

uating those requests, and its recommendations regarding

restitution. (See Jan. 27, 2021 Letter re Restitution ( “Gov’t Res-

titution Ltr.”) (Dkt. 997); Ex. A. to Restitution Ltr. (“Gov’t

Recommendations”).) In an order dated January 27, 2021, the

court acknowledged receipt of the Government’s submission and

indicated that it would award restitution after the Defendant had

an opportunity to respond. (See Jan. 27, 2021 ECF Order.) Rani-

ere filed a response on March 23, 2021. (See Raniere Letter in

Reply to Gov’t’s Request for Restitution (“Raniere Restitution

Ltr.”) (Dkt. 1018).)

1

The court has reviewed the parties’ submissions and has made

certain factual and legal determinations, as set forth below, that

will guide the terms of its forthcoming restitution order. The

court has also identified certain issues that warrant further brief-

ing and, where available, supplemental evidence. Accordingly,

the court DIRECTS the parties to submit supplemental letter

briefs, along with any necessary exhibits and affidavits, and for

the Government to submit a revised set of restitution recommen-

dations that are consistent with the findings of fact and legal

conclusions set forth below.1

I. BACKGROUND

Raniere was convicted of seven counts of conviction, as follows:

• Count One: Racketeering Conspiracy, in violation of 18

U.S.C. §§ 1962(d) and 1963(a). (Presentence Investiga-

tion Report (“PSR”) ¶ 2.)

• Count Two: Racketeering, in violation of 18 U.S.C. §§

1962(c) and 1963(a). (PSR ¶ 3.)

• Count Six: Conspiracy to provide and obtain forced labor,

in violation of 18 U.S.C. § 1594(b). (PSR ¶ 20.)

• Count Seven: Wire Fraud Conspiracy, in violation of 18

U.S.C. §§ 1349 and 1343. (PSR ¶ 21.)

• Count Eight: Sex Trafficking Conspiracy, in violation of

18 U.S.C. §§ 1594(c) and 1591(b)(1). (PSR ¶ 22.)

_______________________________________________________________

1 The court requests that the Government, in making its revised restitution

recommendations, specify for each recommended award exactly which of

the claimed losses it regards as compensable, and the amount(s) that it

recommends awarding in order to compensate for those losses, so that the

court and Defendant can easily discern how the Government arrived at the

total figures for each of its recommended awards.

2

• Count Nine: Sex Trafficking of Jane Doe 5, in violation of

trafficking of 18 U.S.C. §§ 1591(a)(1), (a)(2), and (b)(1).

(PSR ¶ 23.)

• Count Ten: Sex Trafficking of Jane Doe 8, in violation of

trafficking of 18 U.S.C. §§ 1591(a) and (b)(1). (PSR ¶

24.)

The two racketeering counts of conviction are predicated on nu-

merous indictable acts including, inter alia, sexual exploitation of

a minor, Jane Doe 2; identity theft and conspiracy to commit

identify theft of multiple individuals (Jane Doe 1, James Lop-

erfido, Edgar Bronfman, Sr., Jane Doe 3, and Jane Doe 7);

trafficking and document servitude of Jane Doe 4; and sex traf-

ficking and forced labor of Jane Doe 5. (PSR ¶¶ 4, 6-7, 9-11,13-

15, 17-27.) Counts Six, Seven, and Eight concern conspiracies by

Raniere and his co-defendants to obtain labor, assets, and the

performance of sexual acts from lower-ranking members of a se-

cret organization known as “DOS.” (PSR ¶¶ 20-22.) Counts Nine

and Ten concern the sex trafficking of two individual lower-rank-

ing DOS members. (PSR ¶¶ 23-24.)

To date, 100 putative victims have submitted requests for resti-

tution, including Jane Doe 2, Jane Doe 4, Jane Doe 5, Jane Doe

8, and James Loperfido, as well as several additional lower-rank-

ing members of DOS, and many individuals who were not

affiliated with DOS but who nonetheless claim that they were

harmed by Raniere and his co-defendants’ criminal conduct. (See

Gov’t Restitution Ltr.)

II. LEGAL STANDARD

In evaluating restitution claims, the court recognizes that “the

Government bears the burden of proving a victim’s actual loss by

a preponderance of the evidence.” United States v. Finazzo, 850

3

F.3d 94, 117 (2d Cir. 2017). 2 The Second Circuit has “never used

the term ‘actual’ in this context to mean ‘mathematically precise’”

or “adopted a one-size-fits-all standard of precision for applica-

tion in restitution cases.” United States v. Gushlak, 728 F.3d 184,

195 (2d Cir. 2013). Rather, what is required is “only a reasonable

approximation of losses supported by a sound methodology.” Id.

at 196.

Two statutes relevant to this case provide for mandatory restitu-

tion for victims of certain crimes.3 First, the Trafficking Victims

Protection Act of 2000 (“TVPA”) provides for mandatory restitu-

tion for “the full amount of the victim’s losses” for crimes

including forced labor, sex trafficking, and document servitude.

18 U.S.C. § 1593(b)(1). In Raniere’s case, counts Six (forced la-

bor conspiracy), Eight (sex trafficking conspiracy), Nine (sex

trafficking of Jane Doe 5), and Ten (sex trafficking of Jane Doe

8) are covered offenses that give rise to mandatory restitution

under the TVPA, as is Racketeering Act Nine (forced labor and

document servitude of Jane Doe 4). The TVPA defines “victim”

as “the individual harmed as a result of a crime under this chap-

ter.” Id. § 1593(c).

Under the TVPA, victims are entitled to full compensation for

“any costs incurred, or that are reasonably projected to be in-

curred in the future, by the victim, as a proximate result of the

offenses involving the victim,” including, inter alia, “medical ser-

vices relating to physical, psychiatric, or psychological care,” “lost

income,” and “reasonable attorneys’ fees.” Id. §§ 1593(b)(3),

____________________________________________________________

2 When quoting cases and unless otherwise noted, all citations and quota-

tion marks are omitted, and all alterations are adopted.

3 As noted below, the court believes that Jane Doe 2 may be entitled to

mandatory restitution under an additional statute, the Amy, Vicky, and

Andy Child Pornography Victim Assistance Act of 2018, and it asks the

parties to address her eligibility to recover under that statute in their sub-

sequent letter briefs. See 18 U.S.C. § 2259.

4

2259(c)(2). A victim’s compensable losses under the TVPA also

include “the greater of the gross income or value to the defendant

of the victim’s services or labor or the value of the victim’s labor

as guaranteed under the minimum wage and overtime guaran-

tees of the Fair Labor Standards Act.” Id. § 1593(b)(3).

Second, the Mandatory Victim Restitution Act of 1996 (“MVRA”)

requires that defendants convicted of certain crimes, including

crimes of violence or offenses against property that cause a “phys-

ical injury or pecuniary loss” to “an identifiable victim,” “make

restitution to the victim of the offense.” 18 U.S.C. § 3663A(a)(1),

(c). The MVRA applies to certain of Raniere’s crimes of convic-

tion, including racketeering, racketeering conspiracy, and wire

fraud conspiracy. (See PSR ¶ 166.)

The MVRA defines “victim” as “a person directly and proximately

harmed as a result of the commission of an offense for which

restitution may be ordered including, in the case of an offense

that involves as an element a scheme, conspiracy, or pattern of

criminal activity, any person directly harmed by the defendant’s

criminal conduct in the course of the scheme, conspiracy, or pat-

tern.” Id. § 3663A(a)(2). “In restricting its definition of ‘victim’ to

persons proximately harmed by the defendant’s acts, the MVRA

aims to limit restitution to those harms that have a sufficiently

close connection to the conduct at issue.” United States v. Thomp-

son, 792 F.3d 273, 277 (2d Cir. 2015). Thus, the MVRA’s

“definition of ‘victim’ governs the calculation of the reimbursable

loss itself.” Id.

“[C]ourts have uniformly read [the MVRA] to provide for resti-

tution payable by all convicted co-conspirators in respect of

damage suffered by all victims of a conspiracy, regardless of the

facts underlying counts of conviction in individual prosecutions.”

United States v. Boyd, 222 F.3d 47, 50 (2d Cir. 2000). However,

the MVRA “does not authorize the court to order a defendant to

pay restitution to any person who was not a victim” of an offense

5

of conviction. United States v. Reifler, 446 F.3d 65, 121 (2d Cir.

2006). “While the language [in the MVRA’s definition of ‘victim’]

expands what it is that will give rise to compensable loss when a

scheme, conspiracy or pattern is involved, the reference point to

which such conspiracy is tied remains the ‘offense’ of which the

defendant has been convicted.” In re Local #46 Metallic Lathers

Union & Reinforcing Iron Workers & Its Associated Benefit & Other

Funds, 568 F.3d 81, 87 (2d Cir. 2009). In other words, conduct

committed “in the course of the scheme or conspiracy [may] be

considered as a basis for determining compensable harm” only if

the “scheme, conspiracy, or pattern of criminal activity” that en-

compasses that conduct is an element of the offense of

conviction. Id.

Where more than one defendant has contributed to a victim’s

loss, “the court may make each defendant liable for payment of

the full amount of restitution or may apportion liability among

the defendants to reflect the level of contribution to the victim’s

loss and the economic circumstances of each defendant.” 18

U.S.C. § 3664(h). If a defendant owes restitution to multiple vic-

tims, “the court may provide for a different payment schedule for

each victim” based on the victims’ economic circumstances and

the nature and extent of their losses. Id. § 3664(i).

III. DISCUSSION

The Government recommends that the court award restitution to

25 of the 100 putative victims who submitted claims in connec-

tion with this case. 4 (See Gov’t Recommendations.) The

Government identifies 18 of those 25 claimants as victims under

§ 1593 of the TVPA. The other claimants, including the seven to

__________________________________________________

4 Based on the representations in the Government’s letter of January 27,

the court includes in this tally Jane Doe 4, for whom the Government has

not yet formally recommended a specific restitution award because it was

not able to review her request in connection with its prior submission and

recommendation. (See Gov’t Restitution Ltr. at 4, 4 n.3.)

6

[Continued with pages 7 through 12 of Memorandum and Order.]

whom the Government recommends that restitution be awarded

and 75 more to whom the Government recommends that no

award be made, are not identified as victims under the TVPA.

(Id.) The court considers first which of the claimants are entitled

to restitution under the TVPA and, for those who are eligible vic-

tims, which of their losses are recoverable. It then conducts a

similar analysis with respect to the MVRA.

A. Restitution Pursuant to Trafficking Victims Protection

Act of 2000

1. Identification of Relevant Victims

The TVPA defines “victim” as “the individual harmed as a result

of a crime under this chapter.” 18 U.S.C. § 1593(c). The Govern-

ment identifies 18 of the 100 individuals who have submitted

requests for restitution as victims within the meaning of Section

1593 of the TVPA.

Raniere was convicted of two separate counts of sex trafficking,

in violation of 18 U.S.C. § 1591, pertaining to victims Jane Doe

5 (“Nicole”) and Jane Doe 8 (“Jay”). Because sex trafficking in

violation of § 1591 is a covered crime under the TVPA, Jane Doe

5 and Jane Doe 8 are plainly entitled to restitution under § 1593.

Additionally, Raniere’s conviction for racketeering was predi-

cated, in part, on the trafficking for labor and services and

document servitude of Jane Doe 4 (“Daniela”) – conduct that is

criminal under 18 U.S.C. §§ 1590 and 1592. The court requests

that the parties’ supplemental letter briefs address the question

of whether a victim of a predicate racketeering act that is a cov-

ered offense under § 1593 is a victim within the meaning of the

TVPA. Assuming, for now, that victims of covered offenses are

entitled to restitution under § 1593 even if such offenses were

not crimes of conviction themselves, but rather were committed

in furtherance of a racketeering enterprise, the court finds that

Jane Doe 4 is entitled to restitution under § 1593.

7

Raniere was also convicted of sex trafficking conspiracy and

forced labor conspiracy, in connection with his role in a scheme

that used coercive and illegal means to compel lower-ranking

DOS members to engage in uncompensated labor and sexual ac-

tivity. Those conspiracy crimes are covered offenses under the

TVPA. The testimony at Raniere’s trial made clear that lower-

ranking DOS members (referred to as “slaves”) performed un-

paid labor and, in some cases, engaged in sexual activity, and

that they did so at the direction of higher-ranking DOS members

(“masters”), in response to acute social, financial, and emotional

pressures designed and imposed by Raniere and his co-conspira-

tors. In convicting Raniere of these crimes, the jury determined

that the defendants’ conduct met the elements of federal forced

labor and sex trafficking offenses. Accordingly, the court finds

that all lower-ranking DOS members who performed uncompen-

sated labor and services or who engaged in sexual activity, in

connection with their membership in DOS and at the direction of

higher-ranking DOS members, are victims of a covered offense

under the TVPA and are entitled to restitution under § 1593.

Thus, in the court’s view, a putative victim is entitled to recover

under § 1593 if the court finds by a preponderance of the evi-

dence that: (1) she was a lower-ranking “slave” member of DOS5

between February 2016 and June 2017; and (2) in connection

with her membership in DOS and at the behest of a higher-rank-

ing DOS “master,” she either performed unpaid labor or services,

engaged in sexual activity, or both. All restitution claimants who

meet these criteria are statutorily entitled to recover the full

amount of their losses under the TVPA.

__________________________________________________

5 For purposes of this analysis, the court considers DOS members who were

not “first-line masters,” and who therefore were “slaves” to other female

“masters” within DOS and not directly to Raniere himself, to be “lower-

ranking.” (See PSR ¶¶ 84-85.)

8

a. Victims Entitled to Restitution Under TVPA

The court finds, by a preponderance of the evidence, that the fol-

lowing individuals are victims of sex trafficking offenses, forced

labor offenses, or both, and that they are therefore entitled to

restitution under the TVPA.

Daniela Xxxxxxxxx (“Jane Doe 4,” “Daniela”): As stated

above, Racketeering Act Nine, which the jury found the Govern-

ment had proved in support of Count Two, for racketeering,

charged Raniere with the document servitude and trafficking for

labor and services of Jane Doe 4. Assuming that victims of pre-

dicate racketeering acts that are covered offenses under § 1593

may receive restitution under the TVPA, the court finds that Jane

Doe 4 is a victim within the meaning of that statute.

Nicole Xxxxxx (“Jane Doe 5,” “Nicole”): As stated above, Ra-

niere’s conviction on Count Nine concerned his sex trafficking of

Jane Doe 5. The court therefore finds that she is a victim of a

qualifying offense under the TVPA.

Xxxxxxx Xxxx (“Jane Doe 8,” “Jay”): As stated above, Raniere’s

conviction on Count Ten concerned his sex trafficking of Jane

Doe 8. The court therefore finds that she is a victim of a qualify-

ing offense under the TVPA.

Xxxxxx Xxxxxxxx (“Jane Doe 6,” “Xxxxxx”): According to tes-

timony at trial, Jane Doe 6 was recruited into DOS by Lauren

Salzman and served as Salzman’s slave. (Tr. of Keith Raniere

Trial (“Trial Tr.”) at 1601:19-25, 1722:25-1723:10, 1770:21-

1771:2.) She submitted “collateral” in connection with her mem-

bership in DOS, including financial assets and naked

photographs. (Id. at 1723:21-1724:21.) She was branded on her

pelvic area with the DOS brand. (Id. at 1753:23-1754:19.) The

court therefore finds by a preponderance of the evidence that

Jane Doe 6 was a lower-ranking member of DOS during the rel-

evant period.

9

Salzman also testified that, in connection with her membership

in DOS, that Jane Doe 6 sometimes functioned as a “personal

assistant” for her, but that she preferred for Jane Doe 6 to per-

form “executive level administrative type work for DOS,” such as

conducting legal research and reviewing legal contracts. (Id. at

1673:6-1674:20.) Accordingly, the court also finds by a prepon-

derance of the evidence that Jane Doe 6 performed

uncompensated labor and services in connection with her partic-

ipation in DOS. The court determines that Jane Doe 6 is a victim

of a qualifying offense under the TVPA.

Sylvie Xxxxxx (“Sylvie”): Sylvie testified at trial regarding her

recruitment into DOS and her submission of collateral, including

naked photographs and a letter with the potential to disrupt close

family relationships, in connection with her membership. (Id. at

211:4-20, 213:3-214:15, 215:21-24.) The court finds by a pre-

ponderance of the evidence that she was a lower-ranking DOS

member during the relevant period. Sylvie also testified that she

was assigned by her DOS master to seduce Raniere, and that she

had sexual contact with Raniere pursuant to that assignment. (Id.

at 219:13-220:6, 252:6-254:15.) The court therefore finds by a

preponderance of the evidence that Sylvie engaged in sexual ac-

tivity in connection with her role in DOS. The court determines

that Sylvie is a victim of a qualifying offense under the TVPA.

India Xxxxxxxx (“Additional Jane Doe 7,” “India,” “Addi-

tional DOS Victim 1”): Multiple trial witnesses identified

Additional Jane Doe 7 as a member of DOS: a slave who reported

to Allison Mack and who recruited Jane Doe 8 and served as her

master. (See id. at 4197:6-10, 4197:16-18, 4267:23-25, 4325:3-

4328:3, 4333:20-4334:4, 5097:20-21.) The court finds by a pre-

ponderance of the evidence that Additional Jane Doe 7 was a

lower-ranking member of DOS during the relevant period.

Lauren Salzman testified that Allison Mack informed her that she

expected Additional Jane Doe 7 to begin having sexual contact

10

with Raniere in her capacity as Mack’s slave. (Id. at 1794:1-8.) In

a March 3, 2016 email exhange, Raniere wrote to Mack to con-

firm that “[Additional Jane 7] know[s] [that] to complete her

[sic], she needs to take all of her clothes off while I am clothed,

pose in the most revealing way, and have me take a picture of

her with her phone to be immediately sent to you as proof.” (Id.

at 5099:7-17.) The following day, Raniere wrote to Mack, “Any

news on [Additional Jane Doe 7]?” and Mack responded that Ad-

ditional Jane Doe 7 had “changed her flight” would “reach out”

to Raniere regarding “meeting again to complete the assign-

ment.” (Id. at 5097:23-5098:13.) According to the PSR, “Mack

was notified by Raniere that [Additional Jane Doe 7] completed

the assignment. At a later point, [Additional Jane Doe 7] had

sexual contact with Raniere. She told Mack that Raniere per-

formed oral sex on her.” (PSR ¶ 119.)

Additional Jane Doe 7 gave a victim impact statement at Rani-

ere’s sentencing in which she described her participation in DOS,

including being branded, and stated that she was “instructed to

seduce Keith as a test of [her] loyalty” and engaged in “dozens of

sexual encounters” with him that she “would never have con-

sented to” if not for the fear of her DOS collateral being released.

(Stc’g Tr. at 81:16-22, 82:2-10.)

In light of testimonial and documentary trial evidence suggesting

that Raniere and Mack planned to assign Additional Jane Doe 7

to have sexual interactions with Raniere, the Probation Depart-

ment’s finding that Additional Jane Doe 7 had sexual contact

with Raniere, and Additional Jane Doe 7’s own description of

“dozens” of sexual encounters that would not have occurred ab-

sent to her participation in DOS, the court finds by a

preponderance of the evidence that Additional Jane Doe 7 en-

gaged in sexual activity at the instruction of her DOS master and

11

in connection with her role in DOS. Accordingly, the court deter-

mines that Additional Jane Doe 7 is a victim of a qualifying

offense under the TVPA.

Sarah Edmondson (“Additional Jane Doe 13,” “Sarah,” “Jane

Doe 11”): At trial, Lauren Salzman testified that she recruited

Additional Jane Doe 13 into DOS to serve as her slave, and that

Additional Jane Doe 13 submitted collateral in connection with

her DOS membership. (Trial Tr. at 1717:24-1721:22.) Addi-

tional Jane Doe 13 was branded on her pelvic area in connection

with her membership in DOS. (Id. at 1748:22-1749:17.) The

court therefore finds by a preponderance of the evidence that Ad-

ditional Jane Doe 13 was a lower-ranking member of DOS during

the relevant period.

At trial, Salzman testified that the concepts of “time and labor”

were central to DOS in that slaves were expected to make a “full-

time commitment to be always making [their] master more po-

tent.” (Id. at 1671:10-23.) She explained that she conveyed to

her slaves that they “should be seeking to provide the most value

in the time and labor they’re providing,” and that “labor dedi-

cated to furthering the master” was a core component of their

involvement in DOS. (Id. at 1673:1-1674:13, 1671:22-23.) The

court therefore finds by a preponderance of the evidence, on the

basis of Salzman’s testimony, that DOS slaves who reported di-

rectly to Salzman were required to engage in uncompensated

labor. Thus, even though Salzman did not describe specific as-

signments that she gave to Additional Jane Doe 13, the court

finds that Additional Jane Doe 13 is a victim of a qualifying of-

fense under the TVPA.

Xxxxxx Xxxxxxx (“Amanda”): Lauren Salzman testified at trial

that she recruited Amanda into DOS. (Id. at 1732:8-9.) She tes-

tified that Amanda submitted collateral including sexually

explicit photographs and material that, if released, could have

negatively affected her own professional status and her romantic

12

[Continued with pages 13 through 16 of Memorandum and Order.]

partner’s employment. (Id. at 1732:13-22.) She was branded on

her pelvic area, on the same day as Lauren Salzman’s other DOS

slaves. (Id. at 2197:8-15.) The court therefore finds by a prepon-

derance of the evidence that Amanda was a lower-ranking

member of DOS during the relevant period.

In addition to Salzman’s testimony about the centrality of labor

and a “full-time commitment” to her slaves’ involvement in DOS,

she specifically testified that she directed her slaves to “review[]

legal contracts and d[o] legal research.” (Id. at 1671:10-23,

1674:5-13.) Salzman also testified that Amanda was an attorney,

and Amanda’s restitution claim lists “[l]egal for Lauren” as a DOS

assignment to which she devoted 30 hours. (See id. at 1732:10-

12; Xxxxxx Xxxxxxx Restitution Worksheet.) The court there-

fore finds by a preponderance of the evidence that Amanda

engaged in uncompensated labor in connection with her role in

DOS, and it determines that she is a victim of a qualifying offense

under the TVPA.

b. Putative TVPA Victims Not Entitled to Restitution on the

Basis of Existing Record

At this time, the court cannot find by a preponderance of the

available record evidence that the following individuals were vic-

tims of forced labor and/or sex trafficking offenses. The court will

consider sworn testimony submitted by the parties in connection

with their subsequent letter briefs that relates to these individu-

als’ eligibility for restitution under the TVPA, including testimony

that corroborates or disputes facts set forth in the PSR or Victim

Impact Statements.

Camila Xxxxxxxxx (“Jane Doe 2,” “Camila”): Trial testimony

established that Jane Doe 2 was a member of DOS, but as a “first-

line master” rather than a lower-ranking slave. (Id. at 1509:15-

23, 1738:3-1739:7.) While she participated in at least one DOS-

related sexual encounter with Raniere and Jane Doe 5, the testi-

mony at trial did not establish whether her participation in that

13

encounter was specifically compelled by her involvement with

DOS. (See PSR ¶ 107.) Nor does the trial testimony establish by

a preponderance of the evidence that she engaged in uncompen-

sated labor compelled by her membership in DOS. Accordingly,

the court lacks sufficient evidence to conclude, at this time, that

Jane Doe 2 is a statutory victim of Raniere’s forced labor or sex

trafficking offenses under the TVPA. If presented with unrebut-

ted sworn testimony describing Jane Doe 2’s performance of

uncompensated work or participation in a sexual act in connec-

tion with her role in DOS and at the direction of a higher-ranking

DOS member to whom she owed obedience, the court would be

better positioned to determine that Jane Doe 2 is a qualifying

victim under the TVPA.

The court also notes that Jane Doe 2 may be entitled to manda-

tory restitution under 18 U.S.C. § 2259, which provides for full

restitution for victims of child pornography offenses. Covered of-

fenses under that statute include 18 U.S.C. § 2252, which the jury

found that Raniere had violated as a predicate act for his racket-

eering conviction. (See PSR ¶¶ 2, 8.) The court encourages the

parties to address the question of Jane Doe 2’s eligibility for res-

titution under § 2259 in their supplemental letter briefs.

Xxxxx Xxxxxxxx (“Additional Jane Doe 34,” “Xxxxx,” “Addi-

tional DOS Victim 3”): Multiple trial witnesses referred in their

testimony to Additional Jane Doe 34 as a DOS slave who re-

ported to Additional DOS Victim 2, a DOS slave who served

under Mack. (See id. at 1865:15-25, 4408:19-4409:7, 5104:11-

13.) The Government introduced into evidence at trial an email

from Additional DOS Victim 2 to Mack describing collateral that

Additional Jane Doe 34 had submitted and the expectation of

additional forthcoming collateral. (Id. at 5103:18-5104:24.) The

court therefore finds by a preponderance of the evidence that Ad-

ditional Jane Doe 34 was a lower-ranking member of DOS during

the relevant period.

14

The PSR states that Mack and Additional DOS Victim 2 directed

Additional Jane Doe 34 “to read and edit 100 articles for Raniere

during a one-month period” and “encouraged [her] to have a

sexual relationship with Raniere.” (PSR ¶ 121.) Raniere objected

to this portion of the PSR on the grounds that it was based on the

accounts of putative victims who had not testified. (Raniere Obj.

to PSR at 22.) Additional Jane Doe 34 submitted a Victim Impact

Statement that describes “being groomed to be a sexual partner

for [Raniere]” and engaging in repeated sexual activity with him.

(Xxxxx Xxxxxxxx Victim Impact Stmt. at 6-7.) However, because

the only accounts of Additional Jane Doe 34 engaging in uncom-

pensated labor or sexual activity are from unsworn sources, the

court cannot find by a preponderance of the evidence at this time

that Additional Jane Doe 34 was a victim of forced labor or sex

trafficking in connection with her role in DOS.

Xxxxx Xxxxxxxx (“Additional Jane Doe 36,” “Xxxxxxx”): Jane

Doe 8 testified that she recruited Additional Jane Doe 36 into

DOS to be her slave, at Mack’s urging and with Mack’s assistance,

and that she collected collateral from Additional Jane Doe 36.

(Id. at 4387:3-4388:19, 4390:9-4391:6.) The court therefore

finds by a preponderance of the evidence that she was a lower-

ranking member of DOS.

At trial, the Government published into evidence an email ex-

change between Additional Jane Doe 36 and Raniere, in which

they made plans to meet outside at approximately 4:15 a.m. for

a “walk,” after Raniere asked if she was “available at all hours of

the night.” (Id. at 5107:9-5109:13.) In a Victim Impact Statement

submitted to the court, Additional Jane Doe 36 describes how

Mack groomed her for a sexual relationship with Raniere but im-

plies that no such relationship was consummated. (Xxxxx

Xxxxxxxx Victim Impact Stmt. at 1.) Additional Jane Doe 36

does describe, in her statement, performing uncompensated

work including data entry as an aspect of her participation in

15

DOS. (Id.) However, because the court does not have sworn tes-

timony regarding Additional Jane Doe 36’s unpaid labor, it

cannot at this time find by a preponderance of the evidence that

she performed such labor.

Additional Putative Victims: The court also finds that it has in-

sufficient record evidence, apart from unsworn Victim Impact

Statements, to corroborate eight additional putative TVPA vic-

tims’ involvement in DOS or performance of unpaid labor and/or

sexual acts pursuant to such involvement. Some of these individ-

uals were not discussed in the trial testimony at all; others were

mentioned briefly, but the testimony did not establish any details

of their recruitment into DOS, position in DOS, participation in

obligatory DOS rituals, or performance of unpaid labor or sexual

acts in connection with their DOS membership. The individuals

in question are: (1) Xxxxx Xxxxxxxx (“Additional Jane Doe 8”);

(2) Xxxxx Xxxxxxxx (“Additional Jane Doe 14”)6; (3) Xxxxx

Xxxxxxxx (“Additional Jane Doe 15”); (4) Xxxxx Xxxxxxxx

(“Additional Jane Doe 25”); (5) Xxxxx Xxxxxxxx (“Additional

Jane Doe 30”); (6) Xxxxx Xxxxxxxx (“Additional Jane Doe 35”);

(7) Xxxxx Xxxxxxxx; and (8) Xxxxx Xxxxxxxx.

2. Identification of Compensable Losses

Eligible victims under the TVPA are entitled to mandatory resti-

tution totaling the “full amount of [their] losses,” including “any

costs incurred, or that are reasonably projected to be incurred in

the future, by the victim, as a proximate result of the offenses

____________________________________________________

6 While the Government did not identify Additional Jane Doe 14 as a pu-

tative TVPA victim, the court notes that her Victim Impact Statement, a

version of which she read at Raniere’s sentencing, suggests that she was a

member of DOS and that she had a sexual relationship with Raniere. (See

Stc’g Tr. at 87:5-88:25.) The court therefore includes her among the puta-

tive DOS victims who have submitted restitution claims, but for whom the

court lacks sufficient evidence to find are “victim[s]” within the meaning

of the TVPA.

16

[Continued with pages 17 through 19 of Memorandum and Order.]

involving the victim.” 18 U.S.C. §§ 1593(b)(3), 2259(c)(2). Re-

coverable losses include “medical services relating to physical,

psychiatric, or psychological care;” “physical and occupational

therapy or rehabilitation;” “necessary transportation, temporary

housing, and child care expenses;” “lost income;” “reasonable at-

torneys’ fees, as well as other costs incurred;” and “any other

relevant losses incurred by the victim.” Id. § 2259(c)(2). Addi-

tionally, victims under the TVPA recover “the greater of the gross

income or value to the defendant of the victim’s services or labor

or the value of the victim’s labor as guaranteed under the mini-

mum wage and overtime guarantees of the Fair Labor Standards

Act.” Id. § 1593(b)(3).

a. Medical Services

With regards to medical care costs, the court agrees with the Gov-

ernment’s recommendation that losses are compensable only if

supported by a letter from a licensed or credentialed medical pro-

vider, counselor, or social worker. (See Gov’t Restitution Ltr. at

6.) As a general matter, the court finds that the defendants im-

posed on DOS slaves numerous physical and psychological

burdens in order to perpetuate sex trafficking and forced labor

offenses, including sleep deprivation, extreme food deprivation

and compulsory weight loss, stress and psychological abuse,

branding, and unwelcome sexual activity. These burdens, which

were integral to defendants’ commission of the relevant offenses,

were the proximate cause of a wide range of medical care needs,

including but not limited to cosmetic surgery for brand removal

and potentially extensive mental health care.

With respect to mental health care, the court is prepared to find

by a preponderance of the evidence that Defendants’ criminal

conduct proximately caused the full extent of DOS victims’ psy-

chological and psychiatric care needs, absent compelling

evidence of a separate and unrelated mental health issue that

17

was not exacerbated by Defendants’ conduct. Defense counsel ar-

gues that the court should reduce restitution awards to account

for victims’ psychological harms that predated their involvement

with DOS and Raniere. (See Raniere Restitution Ltr. at 28.) In

support, it cites to the Northern District of New York’s decision in

United States v. Pearson, in which the court reduced victims’ res-

titution awards “because [they] presented with some mental

health issues prior to [their] involvement with Defendant, [and]

the Court cannot conclude that the full extent of the mental

health interventions [they] now require[] are causally related to

Defendant’s crimes.” No. 04-cr-340 (TJM), 2009 WL 2383025, at

*4-5 (N.D.N.Y. July 30, 2009).

One of the cruelest aspects of Raniere and his co-defendants’ con-

duct is the way that they preyed upon victims’ preexisting

vulnerabilities and past traumas in order to debase and control

them, often under the guise of healing or self-improvement. In

doing so, the defendants compounded and intensified victims’

preexisting psychological issues. Thus, even where a victim might

have benefitted from mental health care absent her participation

in DOS, the extent and magnitude of her need for such care fol-

lowing her involvement with DOS may be the proximate result

of the defendants’ actions. The court is not well positioned to dis-

entangle the psychological harms that a victim may address

through the receipt of mental health care, let alone to apportion

the costs of such care among underlying harms, and it will not

do so absent clear evidence that the forced labor and/or sex traf-

ficking of a specific victim did not give rise to the full extent of

her psychological care needs.

The court adopts the Government’s recommendation that, where

a medical provider has given an estimated range for a victim’s

future psychological or psychiatric care costs, the court should

award restitution based on the midpoint of that range. (See Gov’t

Restitution Ltr. at 6.) The court also adopts the Government’s

18

recommendation that the cost of cosmetic surgery for brand re-

moval be estimated as $2,500, based on the cost quoted to Jane

Doe 6 by a medical provider specializing in laser skin treatment.

(See id.) Subject to these parameters, and to the other parameters

discussed above, the court finds that TVPA victims’ relevant med-

ical care costs, including mental health care costs, are the

proximate result of Defendants’ commission of forced labor and

sex trafficking offenses and are therefore fully compensable.

b. Nxivm-Related Costs

Several TVPA victims seek restitution for expenses incurred as a

result of their participation in Nxivm and its programming, in-

cluding tuition for ESP seminars and other Nxivm courses,

membership fees for Nxivm groups, costs of “EM” sessions, and

travel and housing costs incurred in order to attend Nxivm pro-

gramming. As a general matter, the court finds that the

defendants’ forced labor and sex trafficking offenses, which per-

tain specifically to DOS, are not the proximate cause of DOS

members’ costs related to Nxivm programming. Many of the vic-

tims were recruited into DOS after they had already become

involved with Nxivm and its programming, and insofar as they

participated in Nxivm programming during the period in which

they belonged to DOS, such participation can likely be attributed

to their involvement with the larger Nxivm community.

At this time, the court is not aware of any evidence providing a

direct causal link between the covered offenses and Nxivm-re-

lated costs. Absent further evidence that the defendants caused

specific victims to incur specific Nxivm programming, housing,

or travel costs in connection with the forced labor and/or sex

trafficking of those victims, the court cannot direct the reim-

bursement of TVPA victims for these costs.

19

[Continued with pages 19 through 22 of Memorandum and Order.]

c. Uncompensated Work

TVPA victims are entitled to recover the value of their unpaid

labor and services, calculated as “the greater of the gross income

or value to the defendant of the victim’s services or labor or the

value of the victim’s labor as guaranteed under the minimum

wage and overtime guarantees of the Fair Labor Standards Act.”

18 U.S.C. § 1593(b)(3). The victims performed labor and ser-

vices not for a single employer, but rather for the benefit of DOS

masters to whom they were indentured. Because the Fair Labor

Standards Act (“FLSA”) applies only to employers who earn at

least $500,000 in annual revenue, see 29 U.S.C. §

203(s)(1)(A)(ii), DOS masters are not covered employers and

their slaves do not have the protection of minimum wage and

overtime guarantees under the FLSA. Accordingly, the value of

the victims’ labor must be calculated based on the “gross income

or value to the defendant.” 18 U.S.C. § 1593(b)(3).

The Government’s proposed methodology for calculating the

value of DOS victims’ unpaid labor looks to the nature of the

work performed, identifies a relevant job classification used by

New York State’s Bureau of Labor Statistics, and uses the mean

hourly wage for that job classification from the year in which the

work was performed to determine the value of the defendant’s

work on a per-hour basis. (See Gov’t Restitution Ltr. at 8-9.) Thus,

for example, the Government uses the mean hourly wage for the

job classification “typist” for a DOS victim who transcribed re-

cordings, and it uses the mean hourly wage for the job

classification “executive administrative assistant” for a DOS vic-

tim who performed administrative work. (See Xxxxx Xxxxxxxx

Restitution Worksheet; Xxxxx Xxxxxxxx Restitution Work-

sheet.) The Government uses the mean hourly wage for the job

classification “personal care and service worker” in order to cal-

culate the value of DOS victims’ labor for the hours spent “on

20

call” in order to satisfy DOS masters’ expectation of slaves’ 24-

hour “readiness.” (See Gov’t Restitution Ltr. at 8-9.)

The court finds that this is a sound methodology for approximat-

ing the value of DOS victims’ unpaid labor. The nature of the

victims’ labor and services, and the circumstances under which

they were obtained, are so unusual that ascribing an appropriate

job classification and hourly wage is a difficult task. The Govern-

ment’s recommended method assumes that the victims, if fairly

compensated, would have been paid the mean salary for the rec-

ognized category of labor that most closely approximates the

work they performed. The court agrees that applying this as-

sumption allows for a reasonable approximation of the value of

the victims’ labor. If the defense believes that certain job classifi-

cations recommended by the Government overstate the value of

the work performed by victims, it may seek to persuade the court

to use alternative job classifications in applying this methodology.

Several TVPA victims seek restitution not only for the specific

work assignments they performed at the behest of their DOS

masters, but also for their obligation to be “on call” for their DOS

masters at every hour of the day and night. In connection with

that responsibility, they seek to recover the mean salary of a “per-

sonal care and service worker” for every hour of their

membership in DOS during which they were not performing

other labor. (See, e.g., Xxxxx Xxxxxxxx Worksheet; Xxxxx

Xxxxxxxx Worksheet; Xxxxx Xxxxxxxx Worksheet.) DOS slaves

were subjected to “readiness” drills that required them to re-

spond to a master’s message within sixty seconds, at any hour, or

be “punished.” (Trial Tr. at 4378:25-4379:10.) The purpose of

these drills, they were told, was to ensure that they were “con-

stantly thinking about [their] commitment to [DOS]” and that

their masters “knew where [they] were at all times.” (Id. at

4173:17-21.) A slave’s punishment for failing to meet a master’s

21

“readiness” demands included, in some instances, being paddled

with a leather strap on her bare bottom. (Id. at 1635:3-6,

1636:16-1637:1.) DOS masters intended for their slaves to un-

derstand that their “master was supposed to [be their] highest

priority and that [their] main job as a slave was to always be

thinking about them . . . and that should be the highest priority

always above all other things.” (Id. at 1642:1-5.)

Raniere questions the appropriateness of compensating victims

for 24 hours of daily labor. (Raniere Restitution Ltr. at 22.) The

court recognizes the unusualness of this form of “labor,” which

defies easy comparison to any kind of work that exists in the reg-

ular economy. But the idiosyncratic nature of DOS slaves’

“readiness” obligations does not negate the fact that they de-

manded lower-ranking DOS members be perpetually available,

at the exclusion of other activities or opportunities to earn in-

come. Trial testimony revealed at least one instance in which a

DOS slave was required to forgo a paid work opportunity because

it conflicted with her commitment to DOS. (See id. at 4391:12-

4392:4.) The Second Circuit has recognized that a court may

award restitution to victims of forced labor on the basis of 24-

hour workdays for which they worked in an “on call” capacity.

See United States v. Sabhnani, 599 F.3d 215, 255-57 (2d Cir.

2010). The court therefore agrees with the Government that DOS

victims’ restitution awards must compensate them for the exclu-

sive, around-the-clock nature of their commitment. Moreover,

because DOS slaves were required to respond to the whims of

their masters (and, in some cases, to those of Raniere) at any

hour, without notice, the court finds that their on-call obligations

were sufficiently analogous to the work of a “personal care and

service worker” to render that an appropriate job classification.

d. Attorneys’ Fees and Legal Costs

Several TVPA victims have submitted claims for recovery of at-

torneys’ fees incurred in connection with these proceedings.

22

[Continued with pages 23 through 25 of Memorandum and Order.]

Insofar as TVPA victims retained legal counsel in connection with

their involvement with the Government’s investigation, their trial

testimony, their victim impact statements, their restitution

claims, or any other matters related to these criminal proceed-

ings, such costs are fully compensable. Claims for attorneys’ fees

and legal costs must be supported by statements from victims’

counsel attesting to the work performed, and by worksheets de-

scribing the work performed and the hours and rates billed. The

court will not award restitution for attorneys’ fees and legal costs

incurred in connection with any separate legal proceedings, in-

cluding any civil litigation.

B. Restitution Pursuant to Mandatory Victim Restitution

Act of 1996

1. Identification of Relevant Victims

As noted above, the MVRA provides for mandatory restitution for

persons who are “directly and proximately harmed as a result of

the commission” of a qualifying criminal offense, including per-

sons harmed by criminal conduct committed in the course of a

scheme or conspiracy. 18 U.S.C. § 3663A(a)(2). Qualifying of-

fenses include crimes of violence and crimes against property,

including those “committed by fraud or deceit,” insofar as they

result in either bodily injury or property loss or damage. Id. §

3663A(c)(1), (b). Identifying individuals who meet the MVRA’s

definition of “victim” therefore requires that the court examine

the covered offenses and, where applicable, the criminal conduct

committed in the course of a criminal conspiracy or scheme to

determine which putative victims were directly and proximately

harmed.

DOS Members: Count Seven, which charged Raniere and cer-

tain co-defendants with wire fraud conspiracy, is based on the

defendants’ scheme to obtain lower-ranking DOS members’

money and property, including rights to assets, credit card au-

thorizations, and sexually explicit photographs and videos, as

23

“collateral” for their involvement in DOS. (PSR ¶ 21.) Where the

Government establishes by a preponderance of the evidence that

an individual was a lower-ranking DOS member who provided

money or property as “collateral,” that individual is a victim of

this offense – even if there is insufficient evidence to establish

that she was also a victim of forced labor or sex trafficking.

The court finds that DOS slaves were victims of wire fraud con-

spiracy if they furnished collateral that included monetary assets,

rights or access to monetary assets, or sexually explicit photo-

graphs or videos of themselves. However, the court does not find

by a preponderance of the evidence that every piece of collateral

furnished by a DOS slave was sufficient to render its provider a

victim of wire fraud conspiracy. In particular, trial testimony es-

tablished that DOS members often recorded accusations,

confessions, or secrets with the potential to harm or embarrass

their subjects (usually either the DOS member herself or a close

family member) as collateral. The court does not find, by a pre-

ponderance of the evidence, that a DOS member was a victim of

wire fraud conspiracy where the only collateral she provided was

a statement of this nature.

Based on these parameters, court finds by a preponderance of the

evidence that the following individuals are victims of the defend-

ants’ wire fraud conspiracy, on the basis of trial testimony

establishing that they secured their membership in DOS by

providing as “collateral” rights to assets, sexually explicit photo-

graphs or videos of themselves, or other money or property: Jane

Doe 5 (“Nicole”) (Trial Tr. at 3852:23-3853:4); Jane Doe 6

(“Xxxxxx”) (id. at 1723:21-24, 1724:19-21.); Jane Doe 8 (“Jay”)

(id. at 4329:23-4330:4); Sylvie (id. at 213:19-214:15.); Addi-

tional Jane Doe 13 (“Sarah”) (id. at 1719:16-20); Additional

Jane Doe 34 (“Xxxxx”) (id. at 5104:11-17); and Amanda (id. at

1732:17-22). Notably, the Government has not yet been able to

establish by a preponderance of the evidence that one of these

24

individuals – Additional Jane Doe 34 – meets the definition of

“victim” under the TVPA. Additional former members of DOS

may be entitled to restitution under the MVRA, if the Govern-

ment provides additional evidence that establishes, by a

preponderance, that they furnished money or property as collat-

eral.

Non-DOS Victims Entitled to Restitution: In addition to crimes

related to his leadership role in DOS, Raniere was convicted of

racketeering and racketeering conspiracy on the basis of numer-

ous criminal predicate acts. To determine the victims of Raniere’s

racketeering offenses, the court must look to the predicate rack-

eteering acts which the jury found, beyond a reasonable doubt,

that Raniere had committed.

The jury found that Raniere had committed a number of identity

theft offenses with specific victims: Jane Doe 1, James Loperfido,

Edgar Bronfman, Sr., Jane Doe 3, and Jane Doe 7. (See PSR ¶¶

4-5, 10-11, 13, 19.) Accordingly, all of these individuals are vic-

tims of crimes committed in furtherance of the racketeering

scheme for which Raniere was convicted. Of these victims, only

James Loperfido has submitted a claim for restitution.

Additionally, the jury found that Raniere and others had con-

spired to alter records for use in an official proceeding, in

violation of 18 U.S.C. § 1512(k), by directing individuals in the

Nxivm community to remove portions of videotapes that were to

be produced in discovery in a copyright lawsuit in the U.S. Dis-

trict Court for the District of New Jersey. (See PSR ¶ 12.) Nxivm’s

counterparties requested the production of certain Nxivm vide-

otapes in support of their claim that Nxivm’s curriculum

contained false statements and violated consumer protection

laws. (Id. ¶ 81.) Acting on Raniere’s instructions, Nxivm members

edited out segments of the videos that contained false claims, and

Nxivm then produced the edited tapes while claiming that they

were unedited. (Id. ¶ 82.)

25

[Continued with pages 26 through xx of Memorandum and Order.]

At trial, an attorney who had represented three of Nxivm’s coun-

terparties in the case – Stephanie Franco, her father Morris

Sutton, and her stepmother Rochelle Sutton (collectively, “the

Sutton family”) – testified that the litigation lasted nearly fifteen

years, and the Sutton family has submitted a restitution claim

seeking over $2.8 million in compensation for litigation costs.

(See Trial Tr. at 4525:15-20, 4533:12-17; Gov’t Recommenda-

tions at 2.) The Sutton family’s attorney testified that counsel

reviewed the edited videotapes in preparation for trial, and that

counsel suspected the tapes had been altered and considered re-

taining an expert to opine on that matter. (Trial Tr. at 4501:1-

17, 4525:25-4527:7.)

The court finds by a preponderance of the evidence that Nxivm’s

production of fraudulent evidence in federal district court litiga-

tion caused pecuniary losses to the Sutton family by requiring

their lawyers to spend time reviewing the altered tapes and de-

termining how to proceed in response. However, the court does

not find that all litigation costs incurred by the Sutton family in

its civil litigation against Nxivm are the proximate result of the

alteration of evidence produced in discovery: many of those ex-

penses would have been incurred even if Nxivm had produced

the unaltered videotapes.

Individuals Not Entitled to Restitution: Absent further evi-

dence, the court finds that individuals other than those identified

above, more than 80 of whom have submitted restitution claims,

are not victims of Raniere’s crimes within the meaning of the

MVRA. This group includes five claimants to whom the Govern-

ment recommend that the court award restitution: Adrian

Xxxxxxxxx (“Adrian”), the brother of Jane Does 2, 3, and 4, who

seeks to recover for uncompensated labor and psychological care,

and Toni Natalie, Barbara Bouchey, Susan Dones, and Xxxx

Xxxxxxx, each of whom seeks to recover primarily for litigation

26

costs she incurred in defending against vexatious litigation initi-

ated by Raniere and his co-conspirators.

The MVRA provides for restitution only to the victims of a de-

fendant’s crimes, not to every person victimized by his harmful

or improper actions. While the jury found that Raniere commit-

ted forced labor offenses, the charges relating to those offenses

were specific to uncompensated work performed by members of

DOS. Accordingly, the uncompensated labor and services per-

formed by Adrian and other members of the Nxivm community,

separate from DOS, are outside the scope of the specific crimes

of conviction, and therefore such harms are not compensable un-

der the MVRA. Similarly, while the court has seen ample

evidence that Raniere habitually bullied and terrorized his de-

tractors and perceived enemies through aggressive litigation,

funded by co-defendant Clare Bronfman and designed to push

his critics past the brink of financial ruin, that conduct is not a

part of any of the crimes of which he was convicted.

Many other individuals who immersed themselves in the Nxivm

community, paying for its programming and subscribing to its

teachings, now seek to recover for the costs of their tuition,

books, housing, and travel, and for the mental health care that

they require as they seek to heal the psychological damage

wrought by the defendants’ conduct. The court recognizes that

Raniere generated participation in Nxivm’s programs through co-

ercive and manipulative tactics, which may cause many former

participants to reasonably believe that they were cheated, misled,

or pressured into paying the price of participation. The court is

sympathetic to the financial toll that involvement in the Nxivm

community took on so many individuals. Even so, the court can-

not find by a preponderance of the evidence, on the existing

record, that any such costs were the proximate result of Raniere

and his co-defendants’ covered offenses. Rather, as the Govern-

ment acknowledges, “the causal link between the defendants’

27

criminal conduct and any losses incurred as a result of the pur-

chase of Nxivm classes and travel is too attenuated to satisfy the

[MVRA’s] proximate cause requirement.” (Gov’t Restitution Ltr.

at 5.)

Many, if not all, of these claimants have suffered legitimate losses

as a result of Raniere and his co-defendants’ abusive, manipula-

tive, and vexatious conduct. In finding these claimants’ alleged

losses to be uncompensable under the MVRA, the court makes

no findings with respect to the validity or severity of their claimed

losses, and it does not suggest that those losses are unworthy or

less worthy of restitution in any moral sense. Notwithstanding

that the harms they have suffered are beyond the scope of those

losses that the court can order the defendant to redress, the court

extends to these claimants both its sympathy and its admiration

for their resilience.

2. Identification of Compensable Losses

Eligible victims under the MVRA are entitled to mandatory resti-

tution tailored to the nature of the offense. Victims of offenses

“resulting in damage to or loss or destruction of property” receive

the return of the property or, “if return is . . . impossible, imprac-

ticable, or inadequate,” payment equivalent to the property’s

value. 18 U.S.C. § 3663A(b)(1). Victims of offenses “resulting in

bodily injury” are entitled to recover the costs of medical care

and “related professional services” relating to mental health care,

the costs of “necessary physical and occupational therapy and re-

habilitation,” and lost income that resulted from the offense. Id.

§ 3663A(b)(2). All victims under the MVRA are entitled to reim-

bursement for lost income and expenses, including child care and

transportation, “incurred during participation in the investiga-

tion or prosecution of the offense or attendance at proceedings

related to the offense.” Id. § 3663A(b)(4).

Raniere’s covered offenses under the MVRA – wire fraud conspir-

acy, and identity theft crimes and conspiracy to alter records for

28

[Continued with pages 29 through 32 of Memorandum and Order.]

use in an official proceeding in furtherance of a racketeering en-

terprise – are crimes resulting in damage to, loss of, or

destruction of property. While all of these crimes deprived vic-

tims of property, they did so in a manner that defies easy

valuation. The court finds that the Government has not yet es-

tablished that any victims under the MVRA are entitled to

restitution beyond the costs incurred (including lost income) in

participating in the Government’s investigation, prosecution, and

related proceedings.

The collection of DOS members’ collateral through the wire fraud

conspiracy deprived them of certain tangible assets but also,

more fundamentally, of control over information and images to

which they ascribed high personal value. That deprivation of con-

trol caused them to endure an array of injuries and losses, the

magnitude of which far exceeds any objective monetary value of

the property that the defendants obtained. The court believes it

is within its authority to order the defendants to return qualifying

MVRA victims’ collateral to them, and it has reason to think that

such an order would be a relief to victims who continue to worry

about the exposure of their collateral by Raniere’s remaining ad-

herents.7 But the mere return of collateral at this late stage, long

after its rightful owners submitted to the injustices and indigni-

ties of DOS membership, would be inadequate compensation for

the damage wrought. To the extent the Government can provide

a reasonable approximation of the value of victims’ collateral in

this context, the court will order restitution in accordance with

that estimate.

___________________________________________________

7 The court encourages the Government, in its forthcoming submission, to

address whether it recommends that the court order the return of DOS

members’ collateral as one aspect of restitution for the victims of the wire

fraud conspiracy offense. And, if so, the court seeks the Government’s input

into how such an order may be enforced.

29

Similarly, identity theft victims were deprived of the exclusive

use of and control over the use of their identity. That “property”

cannot feasibly be returned to them, and the mere cessation of

the theft is inadequate to compensate for the injuries that it

caused. Accordingly, if the Government can reasonably approxi-

mate the value of the damage incurred by Loperfido, he is

entitled to recover an amount commensurate with that value, in

addition to reimbursement for lost income and costs incurred

through his participation in the investigation and trial.

Finally, while the court finds that Nxivm’s production of altered

videotapes in response to a civil litigation discovery request

caused the Sutton family’s lawyers to expend additional time on

the case, and, therefore, caused the Sutton family to incur addi-

tional legal costs, the Government has not yet provided a

reasonable approximation of those costs. The court cannot dis-

cern from the current record, including the Sutton family’s

restitution claim and supporting documentation, what portion of

the Sutton family’s legal costs is directly attributable to the un-

lawful alteration of evidence. Thus, in order for the court to

award restitution to the Sutton family on this basis, the Govern-

ment must reasonably approximate the amount of losses

incurred by the Sutton family as a proximate result of this predi-

cate racketeering act.

IV. CONCLUSION

In light of the above analysis, the court directs the parties to file

supplemental letter briefs, and to append to them any relevant

supplemental evidence, that address the following issues: (1)

whether a victim of a predicate racketeering act that is a covered

offense under § 1593 is a victim within the meaning of the TVPA;

(2) whether Jane Doe 2 is entitled to restitution under 18 U.S.C.

§ 2259; (3) whether there is sufficient evidence to establish that

any of the claimants discussed in section III.A.1.b. of this opinion

are victims under the TVPA; (4) whether any qualifying TVPA

30

victims are entitled to recover for Nxivm-related costs; and (5)

whether appropriate methodologies exist by which the court can

reasonably approximate the value of MVRA victims’ lost prop-

erty. The parties may address any additional issues that they

consider relevant to the subject of restitution including, if appli-

cable, any evidence that they believe the court overlooked in the

foregoing analysis. The court asks that the Government submit a

revised set of restitution recommendations that is consistent with

this analysis, with the underlying bases for all recommended

awards explained in detail.

Accordingly, the court DIRECTS the parties to submit supple-

mental letter briefs, along with any necessary exhibits and

affidavits, according to the following schedule:

• The Government shall submit a letter brief, along with a

revised set of restitution recommendations, by June 21,

2021.

• Mr. Raniere shall submit a responsive letter brief by July

5, 2021.

• The Government may submit a reply letter brief by July

9, 2021.

The court will hold a supplemental sentencing hearing for Mr.

Raniere during the week of July 12 or July 19, 2021. At that hear-

ing, the court will hear argument from the parties, if needed, and

order restitution. The parties are DIRECTED to contact the court’s

Deputy to schedule the hearing. Defense counsel is DIRECTED to

inform the court by May 28, 2021 whether Mr. Raniere consents

to the hearing being held by videoconference.8 The Government

___________________________________________________________

8 See Pub. L. No. 116-136, § 15002(b)(2), (4) (allowing for sentencings in

criminal cases to be conducted by videoconference if the chief judge of the

court “specifically finds … that … felony sentencings under Rule 32 of the

31

is DIRECTED to provide to the court by May 28, 2021 its recom-

mended redactions to this Memorandum & Order, so that the

court may file it on the public docket without exposing victims’

identities or sensitive personal information.

SO ORDERED.

Dated: Brooklyn, New York

May 21, 2021

/s/ Nicholas G. Garaufis_

NICHOLAS G. GARAUFIS

United States District Judge

__________________________________________________________

Federal Rules of Criminal Procedure cannot be conducted in person with-

out seriously jeopardizing public health and safety” and the district judge

in the case finds that delaying sentencing would seriously harm the inter-

ests of justice, so long as the defendant consents to the proceedings being

held by video teleconference); U.S. District Court for the E.D.N.Y. Admin.

Order Nos. 2021-4-1, 2021-5 (finding that sentencing proceedings should

continue to be held remotely to the maximum extent possible and author-

izing individual judges to hold such proceedings by videoconference).

32

I cannot remember his first child's family name but I hope all that back child support or some of it is being paid too.