NXIVM Cult Must Pay Private Eye’s Legal Bills

NEWARK, N.J. (CN) – A federal judge ordered the now-defunct sex cult NXIVM to foot $1.3 million in legal bills incurred by private investigators that it hired to follow an anti-cult specialist.

Billing itself for years as a self-help group, NXIVM shut down in 2018 after its leaders, including “Smallville” actress Allison Mack, were arrested as part of a sweeping racketeering and sexual slavery case. The group’s founder, Keith Raniere, was convicted of sex trafficking, forced labor and wire fraud earlier this year. 

This framed photo of Keith Raniere hung in NXIVM’s headquarters near Albany, New York. (Photo via U.S. Attorney’s Office for the Eastern District of New York.)

The secretive and bizarre group had a history of investigating critics, including allegedly trying to hack into computer of billionaire Edgar Bronfman Sr., the former chairman of the Seagram beverage company who spoke out against NXIVM as two of his daughters became increasingly involved as members.

In one such investigation, the group retained Interfor Inc. to investigate the 2003 disappearance of one of its members, Kristin Snyder. Allegations that Snyder was pregnant with Raniere’s baby have led some to speculate the woman was murdered or killed herself.

NXIVM sued anti-cult crusader Rick Ross around the same time, accusing that Ross had infringed the group’s copyright by publishing several pages of a NXIVM manual on his website. Ross obtained the manual from a former member of NXIVM, then known as Executive Success Programs Inc., who had signed a nondisclosure agreement.

As part of the lawsuit, NXIVM had Interfor put together a dossier with details about Ross’ financial information and personal friends and acquaintances. The investigative company picked through Ross’ curbside garbage outside his home, tried to set up a sting operation, and even reached out to former members of other cults whom Ross had deprogrammed.

NXIVM approved all those methods and never objected to Interfor’s final investigative report.

Ross later sued Interfor and NXIVM for privacy violations, and Interfor in turn demanded that NXIVM cover the costs of the case.

U.S. District Judge Katharine Hayden entered judgment in the case Monday, saying the parties’ indemnity agreement entitles Interfor to recovery of $1.3 million.

The ruling emphasizes that Interfor merely acted within the bounds of its agreement with NXIVM, never tried to intentionally harm Ross, and indeed settled with Ross without admitting any wrongdoing.

“Even had Interfor and Ross not settled,” Hayden wrote, “NXIVM has failed to put forth one scintilla of evidence showing that Interfor intended to injure Ross.”

The judge also called the attorneys’ fees and expenses sought by Interfor as reasonable.

Robert Lack, an attorney for Interfor with the firm Friedman, Kaplan, Seiler & Adelman, did not return an email seeking comment.

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