{00207518 }
UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK
---------------------------------------------------------------x : SARAH EDMONDSON; TONI NATALIE; : JANE DOES 1-13, JANE DOES 15-39, : JANE DOES 41-60; MARK VICENTE; : JOHN DOES 1-17, and JOHN DOES 19-20, : : CIVIL ACTION Plaintiffs, :
: NO. 20-CV-485 v. :
: : KEITH RANIERE; NANCY SALZMAN; : CLARE BRONFMAN; SARA BRONFMAN; : LAUREN SALZMAN; ALLISON MACK; : KATHY RUSSELL; KAREN UNTERREINER; : DR. BRANDON PORTER; : DR. DANIELLE ROBERTS; : DANIELLA PADILLA BERGERON; : ROSA LAURA JUNCO; LORETA J. GARZA : DAVILA; MONICA DURAN; NICKI CLYNE; : NXIVM CORPORATION; : EXECUTIVE SUCCESS PROGRAMS, INC.; : ETHICAL SCIENCE FOUNDATION; and : FIRST PRINCIPLES, : : Defendants. : ---------------------------------------------------------------x
COMPLAINT
Plaintiffs file this complaint pseudonymously against the Defendants for conspiring to
operate, and for operating, a criminal Enterprise under the “NXIVM” umbrella (the “Enterprise”).
Defendants also conspired to participate and participated in a “
V
enture” to
commit sex trafficking, peonage, forced labor and human trafficking offenses in violation of Chapter 77 of Title 18. The central purpose of the conspiracy, Enterprise, and Venture was to entice Plaintiffs to join NXIVM, which functioned as both a Ponzi scheme and a coercive community. Defendants exerted power over the Plaintiffs; took their money; made it
Case 1:20-cv-00485-EK-SMG Document 1 Filed 01/28/20 Page 1 of 189 PageID #: 1
{00207518 }
2 financially, physically and psychologically difficult, and in some cases impossible, to leave the coercive community; and systematically abused Plaintiffs physically and emotionally. In doing so, the Defendants achieved a number of personal benefits including but 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. Many of the Defendants also benefitted financially through the receipt of profits and substantial access to free labor, including personal assistants, housekeepers, drivers, personal shoppers and others. In pursuit of both the Enterprise and the Venture, Defendants engaged in a variety of wrongdoing, some of it tortious and some of it criminal. Each Defendant played a critical role in the conspiracy, and neither the Enterprise nor the Venture could have functioned without them
–
particularly Keith Raniere and Nancy Salzman who created NXIVM, as well as Clare and Sara Bronfman, who served in leadership positions and who invested their vast wealth
–
reportedly $150 million
–
to fund the operations and obstruct the ability of others to uncover the misconduct. It was foreseeable that each of the Plaintiffs would be harmed by this conduct, and all conspirators are liable for the entire amount of the physical, emotional, psychological, and economic harm caused to the Plaintiffs.
SUMMARY OF THE ACTION
1.
Plaintiffs’ claims arise out of their involvement with NXIVM Corporation
(pronounced /NEX-ee-um/), an organization based in Albany, New York and founded by Def
endants Keith Raniere (“Raniere”) and Nancy Salzman
. 2.
NXIVM’s principal business
is the sale of personal improvement and professional
development training programs through Defendant Executive Success Programs, Inc. (“ESP”
)
Case 1:20-cv-00485-EK-SMG Document 1 Filed 01/28/20 Page 2 of 189 PageID #: 2
{00207518 }
3 and other entities.
1
However, as described herein, NXIVM’s insidious reach extended far beyond
just ESP, and it was far more than simply a personal improvement program. 3.
Drawing from methods used in pyramid schemes and multilevel marketing, NXIVM induced students to recruit and form their own downstream sales organizations within NXIVM, so that the students
might work their way up in the hierarchy, known as the “
Stripe P
ath” (after the colored
striped sashes members wore to indicate rank and recruitment achievements), to a level where they could earn commissions and build careers and income for themselves. 4.
However, few students ever qualified for commissions, because the Defendants continually manipulated the program requirements, expanded the required curriculum, and
graded most of the students as failures who needed to work harder and take more of NXIVM’s expensive courses. Out of the more than sixteen thousand people who took NXIVM’s courses,
fewer than one hundred eve
r earned any income from NXIVM’s businesses, and fewer than
twenty-five received substantial earnings within NXIVM. Most of the earnings were received by
the small group collectively known within the organization as the “Inner Circle
.
”
5.
Raniere claimed to
be the conceptual creator of NXIVM’s programs, and the various related legal entities themselves. Defendants promoted NXIVM’s programs in part by representing that Raniere was the world’s smartest man, who allegedly had an IQ of 240 and was
a child prodigy, speaking in complete sentences at age one, mastering college level mathematics in two days at age eleven, winning championship judo and track tournaments, and graduating college with three degrees. None of this was true.
1
Unless otherwise stated, “NXIVM” means NXIVM, ESP, First Principles and all other
NXIVM-related entities identified as such herein. Members of NXIVM were sometimes referred
to as “Nxians” (pronounced “Nexians”) and sometimes as “ESPians” (pronounced “Espians”).
Case 1:20-cv-00485-EK-SMG Document 1 Filed 01/28/20 Page 3 of 189 PageID #: 3
