NXIVM President and Heiress Arrested for Allegedly Running Illegal Pyramid Schemes

Four high-ranking members of an alleged cult accused of branding and enslaving dozens of female followers were arrested Tuesday, including Seagram’s heiress Clare Bronfman and NXIVM president Nancy Salzman.

Bronfman, Salzman, NXIVM’s bookkeeper Kathy Russell and Salzman’s daughter Lauren were all arrested and charged with racketeering conspiracy. The new indictment comes months after the self-help organization’s leader Keith Raniere and Smallville actress Allison Mack were arrested on sex trafficking and forced labour charges.

Bronfman's bail was set at a jaw-dropping $100 million in Brooklyn court Tuesday. She was released after her lawyers entered a not guilty plea. Kathy Russell, Lauren Salzman and Nancy Salzman also pleaded not guilty to the charges.

NXIVM began 20 years ago selling expensive “executive success” coaching to the super rich. Over years it grew into a many-limbed “philosophical movement” that recruited new members via multi-level marketing. People who joined NXIVM were required to call the leader “Vanguard” and wore coloured sashes that denoted their rank.

The new indictment alleges all the defendants, including Raniere and Mack, ran illegal pyramid schemes and recruited young women to have sex with Raniere. Among the allegations are “committing, attempting and conspiring to commit crimes, including but not limited to identity theft, harboring of aliens for financial gain, extortion, forced labour, sex trafficking, money laundering, wire fraud and obstruction of justice.”

In 2002, Sara and Clare Bronfman, heiresses to the Seagram’s liquor fortune, joined NXIVM and became devoted followers of Raniere. The pair would go on to spend “untold millions” on lawsuits against their critics. The new indictment alleges defendants used “harassment, coercion and abusive litigation to intimidate and attack perceived enemies.”

Sometime in the mid-2000s the group’s self-help and goal-setting programs caught the attention of Vancouver’s acting community, including Allison Mack, who was working on the Smallville set. Mack soon became obsessed with Raniere’s teachings, and would go on to become “second-in-command” of a secretive multi-level marketing scheme that allegedly branded women with a combination of Mack and Raniere’s initials, and required members to hand over naked photos and damaging information as “collateral” to prove their commitment to secrecy.

This secretive group, which claimed to be all about women’s empowerment, made headlines last fall and resulted in a federal investigation into NXIVM. Investigators found evidence of women being commanded to have sex with Raniere or risk having their “collateral” released.

The new charges against Raniere and his inner circle suggest the group’s criminal elements extended well beyond the secret “sorority” that branded women.

This story has been updated.

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