New York (February 12, 2020) – 80 victims filed a lawsuit against the leadership of the NXIVM cult in the U.S. District Court for the Eastern District of New York on January 28. 41 Canadian women and men are among the plaintiffs. The complaint alleges that the cult-like self-empowerment group NXIVM ‘functioned as both a Ponzi scheme and a coercive community’ and abused its followers. 19 defendants including the cult founder Keith Raniere, TV actress Allison Mack and the two Seagram heiresses, Clare and Sara Bronfman are accused in the complaint of fraud, identity theft, racketeering, forced labor, sex trafficking, and negligence for engaging in unauthorized practice of psychoanalysis, and mental health counseling. The plaintiffs in this civil case are seeking both compensatory and punitive damages.
While the NXIVM inner circle is awaiting sentencing in their criminal trials regarding crimes in connection with the group’s activities, 80 victims including 41 Canadians, filed a lawsuit against the cult leaders in the U.S. District Court for the Eastern District of New York on January 28. The organization is accused of creating and leading a ‘Ponzi scheme and coercive community’ designed to financially and emotionally abuse followers.
The civil lawsuit against the NXIVM cult leadership
28 Canadian women and 13 Canadian men are plaintiffs in the lawsuit that was filed by attorneys from the Philadelphia law firm Kohn Swift & Graf. However, only three named plaintiffs in total are stated in the 189-page complaint. Among the defendants are the cult founders Keith Raniere and Nancy Salzman, TV actress Allison Mack and the two Seagram heiresses, Clare and Sara Bronfman.
NXIVM ‘functioned as both a Ponzi scheme and a coercive community,’ according to the complaint. The organization arose as a self-empowerment group selling ‘personal improvement and professional development training programs.’ However, the complaint describes methods used in pyramid schemes and multilevel marketing regarding NXIVM recruitment activities. The complaint described in detail the alleged crimes by the Inner Circle.
‘Defendants exerted power over the plaintiffs; took their money; made it financially, physically and psychologically difficult, and in some cases impossible, to leave the coercive community; and systematically abused plaintiff’s physically and emotionally,’ the complaint said. ‘In doing so, the defendants achieved a number of personal benefits including by not limited to enriching themselves; wielding power over others; advancing in the perverse social order they created; and enhancing their own feelings of self-esteem.’
The victims of the NXIVM cult claim that the 19 defendants conducted fraud, identity theft, racketeering, forced labor, sex trafficking, and negligence for engaging in unauthorized practice of psychoanalysis, and mental health counseling. The plaintiffs are seeking both compensatory and punitive damages.
Keith Raniere is the ‘grandmaster’ and founder of NXIVM. His followers were required to call him ‘Vanguard’. According to the complaint, the 58-year-old claimed to be the conceptual creator of NXIVM’ s programs. The organization was built around him and advertised him as the ‘world’s smartest man’ with an alleged IQ of 240 and that he was a ‘child prodigy’. None of this was true.
On June 19, 2019, Raniere was convicted by a jury of conspiracy, racketeering, forced labor conspiracy, sex trafficking conspiracy, sex trafficking, attempted sex trafficking, and wire fraud conspiracy. After he has been found guilty on all counts, he is now awaiting sentencing in his criminal trial.
‘As found by the jury, Keith Raniere masqueraded as a self-help guru to gain the trust of his followers, and then exploited them for his own financial gain and sexual gratification,’ stated United States Attorney Donoghue in a press release after Raniere’s conviction. ‘Raniere and his co-conspirators will now face the consequences for the serious crimes they committed and the profound harm they have caused their victims.’
The Inner Circle
Besides Raniere, the complaint accuses 18 further members of the so-called inner circle. The complaint claims that ‘Defendants knew they were managing and operating a racketeering Enterprise that destroyed hundreds of lives while Defendants enriched and aggrandized themselves, maintaining a highly abusive environment that enabled Defendants to manipulate and coerce members into doing as Defendants commanded, for both financial and psychological gain.’
The complaint alleges that Salzman, co-founder and principal therapist of NXIVM, ‘conducted experiments on human beings within the NXIVM community, including the ‘Human Fright Experiment,’ and the Tourette’s and OCD ‘studies,’ all without voluntary informed consent or professional oversight.’ In her criminal trial, she pled guilty to one count of racketeering conspiracy.
The millionaire sisters Clare and Sara Bronfman are alleged of investing their vast wealth – reportedly $150 million – ‘to fund the operations and obstruct the ability of others to uncover the misconduct’ while serving in NXIVM leadership positions. Clare Bronfman is further accused of abuses of the legal system including causing attorneys to send letters to victims, threatening them with criminal prosecutions and civil legal actions and causing authorities to open investigations on victims by false pretense in order to silence and intimidate them. In her criminal trial, Clare Bronfman is also awaiting sentencing with offenses in relation to NXIVM.
TV actress Allison Mack held a high position in a cult-intern women slavery group called ‘DOS’ or ‘the Vow’. She was charged with federal sex trafficking and conspiracy crimes and pled guilty to counts of racketeering and racketeering conspiracy in relation to NXIVM in April of last year. She is also awaiting sentencing in her criminal trial.
Marina Burghard writes for Canadian Fraud News about fraud-related cases, whistleblower, jurisdiction, identity theft, consumer protection, etc. – essentially about scams and how to protect yourself against this kind of fraudulent criminal behavior. She holds a Master’s degree in Political Science where her interest in criminology grew. Besides fraud, Marina’s scientific interest lies in terrorism, extremism and how to deal with it as a society.