Ballston Spa — A class-action lawsuit accusing Seagram's liquor fortune heiress Sara Bronfman-Igtet of helping fleece millions of dollars from clients of NXIVM has been filed in state Supreme Court in Saratoga County.
The lawsuit filed on behalf of two former NXIVM students, Isabella Martinez and Gabriella Leal, seeks restitution for the thousands of people who allegedly were duped into taking high-priced courses that were no more than a multi-level marketing scheme. A related lawsuit was filed earlier this month in Kings County.
The court filing casts Bronfman-Igtet as a key figure in the upper ranks of NXIVM and its associated businesses, including Executive Success Programs, and accuses the heiress of using her wealth and connections to help NXIVM founder Keith Raniere dupe clients into believing they were paying for legitimate training and education courses.
It was filed as Bronfman-Igtet's sister, Clare Bronfman, has been indicted on federal criminal charges along with Raniere and NXIVM co-founder Nancy Salzman, among others.
Bronfman-Igtet, the wife of Libyan businessman Basit Igtet, has not been identified as a target in the federal criminal case, but the lawsuit accuses her of being a key player in NXIVM's marketing and recruitment strategies.
The lawsuit claims Bronfman-Igtet knew that Raniere and Salzman had allegedly padded their resumes with false credentials, including casting Raniere as the world's smartest man and claims that he was a child judo champion and high school track record holder.
"Defendant Bronfman-lgtet reviewed and approved the ESP marketing materials before they were released, which featured Raniere's bogus qualifications and claimed that the program was a practical MBA," the lawsuit states. "Defendant used her private jet to provide travel for celebrities who fronted the ESP organization. ... Moreover, there was no end to the program. There was no final course, final exam, final certification, or graduation.
"Rather, this insidious scheme was designed to make student-victims take more classes and more classes — with no end," the lawsuit reads. "The true goal ... was to extract as much money from student-victims, as quickly as possible, to finance Raniere's criminal enterprise."
The lawsuit also picked apart Bronfman-Igtet's credentials, noting she had allegedly claimed to be an "education entrepreneur with 15 years of experience in the field of human potential ... (but) lacks teaching certificate, lacks a college degree, and lacks a basic high school diploma."
Bronfman-Igtet's alleged role in setting up "more than 100 shell corporations to hide profits and avoid federal income tax and state sales tax on the ESP classes" formed the basis, in part, of the lawsuit's claim that NXIVM and its affiliated Executive Success Program has violated New York's enterprise corruption statute and general business law.
Under a section in the lawsuit subtitled "The Truth," it claims Bronfman-Igtet knew "that Keith Raniere and Nancy Salzman were actually con-artists who were running another illegal multi-level marketing scam, and that Keith Raniere was not one of the world's smartest men, but was instead using his position within ESP to have sex with women and children."
The criminal case — pending in Brooklyn — was filed against Raniere, Salzman and her daughter, Lauren Salzman, Clare Bronfman, television actress Allison Mack, and Kathy Russell, a longtime bookkeeper for NXIVM.
A seven-count superseding indictment charges the six defendants with a mix of crimes that include identity theft, harboring of aliens for financial gain, forced labor, sex trafficking and wire fraud.
The charges allege the defendants took part in recruiting and grooming sexual partners for Raniere and of using "harassment, coercion and abusive litigation to intimidate and attack perceived enemies and critics of Raniere."
The indictment, which describes NXIVM as having been run as a type of pyramid scheme, alleges that they encouraged "associates and others to take expensive NXIVM courses, and incur debt to do so, as a means of exerting control over them and to obtain financial benefits for the members of the enterprise."
NXIVM, which has been described by some experts as a cult, developed a reputation for aggressively pursuing critics and defectors who broke from its ranks. The organization has been accused of using litigation to punish defectors who have criticized Raniere, NXIVM or its training methods.
In furtherance of the litigation strategy, NXIVM required its employees and devotees to sign non-disclosure agreements that were often used as weapons in court proceedings against defectors or critics.
All of the defendants except for Raniere have been released on bond amounts ranging from $50,000 to $100 million. Raniere's efforts to post bond have been rejected by a federal judge and he remains held at the Metropolitan Detention Center in Brooklyn.
All of the defendants were described as flight risks by federal authorities, and the conditions for the five who were released include home detention and electronic monitoring.
The arrests were part of an investigation that led to the indictment in April of Raniere and Mack, a longtime NXIVM member. They were initially charged with sex trafficking and conspiracy for allegedly organizing a secret group within NXIVM — a slave-master club that some of its female members said they felt coerced into joining. Some women were later branded with a design that included the initials of Raniere and Mack.
NXIVM — headquartered in Colonie and with offices in Los Angeles, Canada and Mexico — suspended its operations this summer in the wake of Raniere's arrest at a luxury beach villa in Puerto Vallarta, Mexico. In Mexico, authorities said, Raniere got rid of his mobile phone and used encrypted email to communicate. It took authorities nearly two months to locate him before he was deported and arrested by U.S. federal agents.
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