Liquor Heiress Pleads Guilty in NY Sex-Cult Case

Seagram’s liquor heiress Clare Bronfman, wearing blue pants and a white top, leaves Brooklyn federal court after pleading guilty Friday, April 19, 2019 to charges related to the NXIVM sex cult case. (CNS Photo/Amanda Ottaway)

BROOKLYN, N.Y. (CN) – And then there was one. Two more defendants in a New York sex cult case pleaded guilty Friday afternoon, leaving only alleged cult leader Keith Raniere to stand trial next month.

Seagram’s liquor heiress Clare Bronfman, 40, and Kathy Russell, 61, are a longtime bankroller and bookkeeper, respectively, of the purported self-help group NXIVM. They offered back-to-back Good Friday pleas in Brooklyn, making them the fourth and fifth defendants of six in total to plead guilty in the case.

Bronfman pleaded guilty to charges of conspiracy to conceal and harbor illegal aliens for financial gain, and fraudulent use of identification.

“Your Honor, I was afforded a great gift by my grandfather and father,” Bronfman said in a small voice and slight British accent to U.S. District Judge Nicholas Garaufis, reading from prepared remarks. “And with the gift comes immense privilege, and more importantly tremendous responsibility. It does not come with an ability to break the law; it comes with a greater responsibility to uphold it. I failed to uphold the following laws set forth by this country, and for that I am truly remorseful.”

Bronfman wore a loose white top and blue pants, an airy scarf, and glasses. Prosecutors have estimated she faces 21 to 27 months in prison — though she faces a maximum of 25 years — and will owe about $96,000 in restitution payments to a Jane Doe 12. She will also have to forfeit $6 million within 60 days, based on the property used to facilitate the harboring charge. She is set to be sentenced July 25 at 2:30 p.m.

Assistant U.S. Attorney Moira Penza said Bronfman made false statements to help a woman she called Jane Doe 12 get a work visa for the United States. The woman then worked for Bronfman and for a NXIVM organization, Bronfman admitted, and was not paid.

Bronfman also admitted to helping Raniere use the credit card of a woman who had died. Penza called the woman Jane Doe 7, but it seems likely that woman was Pamela Cafritz, a former lover of Raniere’s. Bronfman’s office handled the logistics of the payments, she told the judge.

Prosecutors say the secretive group NXIVM included an inner circle called DOS where women were trafficked, branded, held as slaves and forced to have sex with NXIVM founder Keith Raniere. Raniere is said to be the leader of DOS.

Neither Bronfman nor Russell is charged with being a member of DOS, though prosecutors had alleged they were part of the overarching conspiracy.

Russell, whose hearing began just a few minutes after Bronfman left the courthouse, pleaded guilty to visa fraud. She told Garaufis she was “not really” employed at the moment, though she’d previously worked as an accountant.

She told the court she had helped a Mexican national named Loretta Garza Davila obtain a TN visa to work in the United States by making false statements to the U.S. Consulate in Mexico.

A TN visa is a work authorization visa related to the NAFTA accord between the U.S., Mexico and Canada. Russell wrote to the consulate that Garza would hold the job title of “Management Consultant” at NXIVM Corporation, even though Russell knew Garza actually worked for a company called Rainbow Cultural Garden, a controversial, expensive so-called education facility for children, founded by Raniere.

Russell also knew Garza was not working for the salary Russell had listed, she said.

“I know what I did was wrong and I am very sorry for the trouble I caused,” Russell said Friday. “I compromised my principles and I’m going to have to live with that for the rest of my life.”

She wore a deep olive blazer with a white shirt, black pants, and glasses.

Russell faces a maximum of 10 years in prison, but the government estimated she will serve six to 12 months. She is set to be sentenced July 31 at 11:30 a.m.

Bronfman, the youngest daughter of the Seagram’s CEO who sold the 143-year-old liquor empire to Vivendi in 2000, formerlyfaced charges of conspiracy and identity theft, as well as violations of federal anti-racketeering law. Outside the courthouse afterward, celebrity attorney Mark Geragos, whom she recently retained, told reporters he was grateful the conspiracy charges had been dropped.

“It has been an arduous experience for her to have to go through this,” Geragos said, saying no one who knew Bronfman could have ever guessed she’d end up a felon.

Raniere has claimed no income and almost no assets, and his lifestyle and teachings were said to have been bankrolled at least in part by Bronfman and her sister Sara Bronfman, who has not been charged in the case.   

Russell was charged with racketeering conspiracy. Both were arrested in July 2018.  

The indicted heiress has been out on $100 million bond; Russell on $25,000. That did not change Friday.

Russell allegedly kept books for NXIVM from 2002 to 2014, while Bronfman served on its executive board.

Where Bronfman’s court appearances have contained some drama, Russell has seemed a mostly quiet, minor player throughout.

Bronfman collapsed in open court last month as Judge Garaufis attempted to determine whether she had hired lawyer Michael Avenatti to represent her in the case.

She said Avenatti had briefly represented her in a consulting capacity. Bronfman retained Geragos, who is linked to Avenatti by news reports that say he was the unnamed co-conspirator described in criminal complaints filed against Avenatti on March 25.

Court discussions eventually revealed that Avenatti and Geragos had met with U.S. prosecutors to request the government change its position on Bronfman’s request to sever her trial from Raniere’s in exchange for information Avenatti supposedly had.

Garaufis denied Russell’s request to dismiss the indictment against her on April 12. The lead attorney on Russell’s case is Justine Harris of Sher Tremonte.

Court papers say DOS operated like a sex-trafficking pyramid, and women at the top, known as “first-line masters,” recruited other women to serve under them.

Members had to keep to low-calorie diets and were extorted into remaining in the group by collateral, such as nude photos or damaging information, with the fear that it would be released if they got out of line, prosecutors say.

Both Bronfman and Russell were sexual partners of Raniere, according to court papers, as were alleged “first-line masters” Lauren Salzman and former “Smallville” actress Allison Mack, who pleaded guilty March 29 and April 8, respectively. Salzman’s mother Nancy Salzman, a co-founder of NXIVM, pleaded March 13.

It’s not clear whether any of the five women defendants will serve as cooperating witnesses and testify against Raniere.

Russell and Bronfman, along with Nancy Salzman, had moved to sever their trial from the other three, as they were not accused of being involved in DOS.

The motions to sever from the women defendants intensified after prosecutors leveled child-pornography charges against Raniere about a month ago.

Prospective jurors were called to the courthouse the week of April 8 to fill out questionnaires, and voir dire is set to begin Monday.

Opening arguments in Raniere’s trial are expected May 7. Nancy Salzman faces sentencing July 10, while Lauren Salzman and Mack are set to be sentenced on Sept. 11.

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