Co-Founder of Group Tied to Sex Slavery Pleads Guilty

BROOKLYN, N.Y. (CN) – The former president and co-founder of NXIVM, a self-help group labeled by prosecutors as a pyramid scheme-turned-sex slavery ring, pleaded guilty Wednesday to racketeering conspiracy charges.

Short and slight of build, the 60-something Nancy Salzman confessed in court this afternoon that distance from the accused cult has helped her to appreciate that her actions “were not just wrong, but criminal.”

“I still believe that some what we did was good,” Salzman said of NXIVM, which she founded in the 1990s with Keith Raniere. “The problem began when I compromised my principles.”

Though NXIVM itself has not been charged with a crime, Raniere has been behind bars awaiting trial since mid-2018. Known in the group as “Vanguard,” Raniere is said to have been at the top of the secret sex-trafficking ring within NXIVM known as “The Vow” or “DOS.”

Other defendants in the case include Salzman’s daughter, Lauren Salzman; actress Allison Mack; Seagram’s liquor heiress Clare Bronfman; and reported NXIVM bookkeeper Kathy Russell.

Portraying her plea as the start of atonement, Salzman cried while reading her statement this afternoon to U.S. District Judge Nicholas Garaufis.

“Judge Garaufis, I want you to know that I am pleading guilty because I am, in fact, guilty,” Salzman said.

“I am deeply sorry for the trouble I have caused my daughter, the pain I have caused my parents,” she added, as defense attorney David Stern put an arm around her shoulders.

Judge Garaufis handed Salzman a glass of water when she finished speaking. Her lawyers did not immediately comment outside the courtroom.

Salzman, who is represented by attorneys at Rothman Schneider, is the first defendant in the case to plead guilty.

Wearing glasses, a dark suit jacket, gray pants and a white collared shirt, Salzman admitted in court today to acts of “improper prying,” including email hacking.

Assistant U.S. Attorney Moira Penza said Salzman gained access to and unlawfully monitored the email accounts of people perceived to be enemies of NXIVM. 

Salzman also confessed to having directed others to doctor video that NXIVM was supposed to produce in a New Jersey civil court case. The tapes included footage of Salzman teaching NXIVM classes, Penza said.  

Raniere is said to have created DOS within NXIVM in 2015. Prosecutors say he relied on women, known as “masters,” to recruit “slaves” to join DOS, while concealing Raniere’s position at the top of the pyramid. 

After collecting compromising photos of their recruits, or damaging information about their family members, the “masters” purportedly blackmailed the “slaves” into keeping the group a secret and having sex with Raniere.

The government called in May for the forfeiture of an upstate New York house where they say Raniere repeatedly had sex with at least three of his “slaves.” According to the federal forfeiture complaint, the house was purchased in 2004 by a company run by Salzman.

Raniere purportedly referred to the house at 8 Hale Drive in Halfmoon, N.Y., as the “library.”

The Albany Times Union called it his “private sex lair.” A judge unsealed search warrants last year at the Times Union’s request, revealing that agents seized items including audio and video recording equipment, a book called “History of Torture,” a box of white pills, a DVD drive, DVDs and VHS tapes, and other storage devices.

Unlike her daughter, Nancy Salzman was not alleged to have had any role in DOS. In the group NXIVM, she was purportedly known as “Prefect.”

Scheduled to be sentenced on July 10, she faces a maximum of 20 years but prosecutors have recommended a sentence of 33-41 months. Salzman has been out on bail since her arrest in July alongside her daughter, Bronfman and Russell.

Salzman’s daughter, said to be the “first-line master in DOS,” faces charges including extortion, wire fraud and forced labor.

As a high-level slave master in the group, Lauren Salzman allegedly helped lead ceremonies in which women were branded with Raniere’s initials.

Documents unsealed Wednesday include an earlier motion to sever filed by Nancy Salzman, Bronfman and Russell. It appears to have been filed in January.

“It is impossible for Clare Bronfman, Kathy Russell, and Nancy Salzman to obtain a fair trial if they are tried together with the other Defendants,” the motion states. “The allegations against Keith Raniere, Allison Mack, and Lauren Salzman are so sensational and inflammatory — and so different in kind from the allegations against Bronfman, Russell, and Nancy Salzman — that unfair prejudice to Bronfman, Russell, and Nancy Salzman is inevitable unless the two groups are severed and tried separately.”

NXIVM appears to have closed down for the time being.

“It is with deep sadness that we inform you we are suspending all NXIVM/ESP enrollment, curriculum and events until further notice,” a notice on the company’s website states.

“While we are disappointed by the interruption of our operations, we believe it is warranted by the extraordinary circumstances facing the company at this time.  We continue to believe in the value and importance of our work and look forward to resuming our efforts when these allegations are resolved.”

Jury selection in the trial begins April 15, with opening arguments set for April 29.

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