NXIVM's files on 'enemies' debated in court

TProsecutors want to introduce documents; defense claims they're bogus

The Albany Times-Union/May 15, 2019

By Robert Gavin

New York — Federal prosecutors want jurors in Keith Raniere's trial to see the purported financial records of "enemies of NXIVM" such as federal judges, journalists and political consultant Roger Stone.

Assistant U.S. Attorney Moira Penza told Senior U.S. District Judge Nicholas Garaufis on Tuesday that she plans to introduce the evidence that was uncovered by federal agents during a March 2018 search of NXIVM president Nancy Salzman's Oregon Trail residence in Halfmoon.

The evidence, she said, would be entered during the testimony of a federal task force agent, State Police Investigator Charles Fontinelli. He would be the third person to testify in the trial of NXIVM spiritual leader Keith Raniere, 58, in U.S. District Court in Brooklyn. Raniere's charges include racketeering, sex trafficking and forced labor.

The trial of the man known within NXIVM as "Vanguard" was adjourned without testimony on Tuesday because an alternate juror fell ill. It is scheduled to resume Wednesday with the continuing testimony of former senior NXIVM member Mark Vicente, who has not yet been cross-examined by Raniere's defense team.

Penza told the judge that Fontinelli discovered the documents in file folders in a plastic box in Salzman's residence. The same search uncovered more than $520,000 in cash stashed throughout the residence. Salzman pleaded guilty in March to one count of racketeering conspiracy; Raniere is the only one of the six original defendants in the case who has not pleaded guilty.

The prosecutor said the material was identified as bank records of Edgar Bronfman Sr., the Seagram's tycoon and father of top NXIVM supporters Clare and Sara Bronfman; cult expert and longtime NXIVM adversary Rick Ross; as well as politicians, judges overseeing NXIVM litigation, political consultants such as Stone and Buffalo-based fixer Steve Pigeon, NXIVM's own lawyers and employees of the Times Union.

Stone — currently facing federal charges of lying to Congress and witness tampering — told Newsweek last year that he was introduced to NXIVM by former state Senate Majority Leader Joseph L. Bruno of Brunswick.

Stone, a self-described "dirty trickster" and longtime associate of President Donald J. Trump, said that he attended one of NXIVM's classes and concluded it was a self-improvement program with special appeal for women.

"I worked for them for two months, in which I convinced them that they needed a lawyer, not a lobbyist," Stone told the magazine.

In September 2015, the Times Union reported that former high-ranking NXIVM member Kristin Keeffe had accused the organization of hiring a Canadian investigative firm, Canaprobe, to sift through the financial records of Ross, six federal judges, including four based in Albany: then-Chief Judge Gary L. Sharpe; since-retired U.S. Magistrate Randolph Treece; bankruptcy Judge Robert E. Littlefield Jr., and Senior U.S. District Judge Thomas J. McAvoy. The judges all presided over cases involving NXIVM or something in which it had an interest.

The other judges, based in New Jersey, included U.S. District Judge Dennis M. Cavanaugh and U.S. Magistrate Mark Falk, who both presided over a 2006 lawsuit that NXIVM filed against Ross. Keeffe had alleged NXIVM also targeted the financial records of Times Union Publisher and CEO George Hearst, Editor and Vice President Rex Smith and former reporter James Odato, who had written extensively about NXIVM.

Keeffe for years played a pivotal role as a "legal liaison" for NXIVM and was part of Raniere's inner circle. She abruptly left the organization with her young son with the assistance of a State Police investigator.

Keeffe's allegations were in emails and recorded conversations attributed to her that had been filed in Albany County Court in a computer trespass case against former NXIVM financial advisor Barbara Bouchey and several other NXIVM adversaries. The charges against Bouchey were dropped in February 2016.

Keeffe had alleged that Clare Bronfman ordered the collection of records at the request of Raniere.
Last Thursday, Vicente testified that he believes Keeffe and Raniere have a son together.

On Tuesday, Penza said she also wants to admit two collections of emails in accounts she characterized as "entirely criminal."

Raniere attorney Marc Agnifilo told the judge the documents are hearsay and assembled on the orders of Keeffe. Agnifilo suggested Penza wants to avoid calling Keeffe to the stand.

Agnifilo also said the bank records gathered by Canaprobe were bogus. Court records filed in Canada indicate Canaprobe had allegedly provided the Bronfman sisters with concocted reports.

"None of this is true. None of this is valid," Agnifilo said. "They didn't actually check on anybody."

Penza responded that whether they were real or fake was irrelevant, while the question of whether NXIVM believed they were genuine was of significant import in Raniere's case, which has already involved extensive testimony about NXIVM's strategy of using litigation to attack opponents, including former members.

"This is not the type of evidence that can just be dumped in a jury's lap," Agnifilo said. "They're making a judgment decision not to call (Keeffe) because they're afraid of the cross-(examination) —and maybe they should be."

"Mr. Agnifilo is the one afraid of Kristin Keeffe, because the defendant tortured her," Penza responded. "That's why he hasn't spoken to her."

Penza said NXIVM "laid down with dogs and maybe they got fleas and maybe they got defrauded."

Garaufis said he would review the materials and issue a decision.

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