Nxivm ‘Sex Cult’ Was Also a Huge Pyramid Scheme, Lawsuit Says
Eighty people contended that they were bilked out of millions of dollars through a “coercive” scheme by the self-help group.
By Nicole Hong Jan. 29, 2020
The self-help group Nxivm gained a reputation as a “sex cult” last year after its leader, Keith Raniere, was convicted of coercing some of his female followers into sexual servitude, even creating a ritual in which they were branded with his initials.
But a lawsuit filed in federal court in Brooklyn on Tuesday illuminated another unsavory side of Nxivm. Most participants in the group were not Mr. Raniere’s sex slaves, the lawsuit said, but rather victims of an insidious pyramid scheme who were lured by false scientific claims into paying thousands of dollars for classes.
“They get you to not trust your own decision-making process,” said one former member, Sally Brink, who said she paid $145,000 to take Nxivm classes over the years. “They tell you that you need them to make decisions. You start to doubt everything.”
Ms. Brink was among the 80 plaintiffs who sued Mr. Raniere and 14 other associates of Nxivm (pronounced NEX-ee-um).
The 200-page lawsuit details sprawling allegations of fraud and abuse, including that Nxivm’s leaders drew “from methods used in pyramid schemes” to take people’s money and make it “physically and psychologically difficult, and in some cases impossible, to leave the coercive community.”
Ms. Brink, 47, said in an interview that she was introduced to the group in her late 20s. She was struggling as the new co-owner of a restaurant in a Vermont college town, weighed down by 18-hour days.
Her college roommate recommended turning her life around through Nxivm, pitching it as a class that helped entrepreneurs reach their goals. The roommate told her the program had been developed by a brilliant thinker named Keith Raniere.
Ms. Brink flew to Los Angeles in 2004 for a five-day course, hosted at a home in the Hollywood Hills. At first, she found the teachings to be profound. Her relationships with her employees and her family improved.
More than a decade later, however, Ms. Brink was fighting to escape. The worst moment came in 2017, she said, when she was diagnosed with breast cancer. Nxivm associates told her that she had given herself the disease to get her husband’s attention. Instead of spending the money she had raised online for treatment, they urged her to make the ethical decision to die, she added.
Ms. Brink’s allegations of emotional abuse are echoed throughout the lawsuit, which comes seven months after Mr. Raniere, 59, was found guilty of racketeering, sex trafficking and other charges.
Hollywood actors, business executives and professional athletes were among the people who took Nxivm courses, according to former participants. Mr. Raniere’s most fervent followers included Allison Mack, the former “Smallville” actress, and Clare Bronfman, an heiress to the Seagram liquor fortune.
Ms. Mack and Ms. Bronfman were also charged in the racketeering case and pleaded guilty before the trial, along with Nancy Salzman, a former psychiatric nurse who had co-founded the group with Mr. Raniere in Albany, N.Y.
Almost all of the plaintiffs in the lawsuit have hidden their real names, saying their reputations will suffer or they will lose job opportunities if they were to be linked to the group. An estimated 16,000 people have taken Nxivm courses.
Marc Agnifilo, a lawyer for Mr. Raniere, said the lawsuit would allow Mr. Raniere to argue that some former Nxivm members did not provide truthful testimony at his trial.
“As several of the plaintiffs in this lawsuit testified at trial that they were not planning on bringing a lawsuit, Keith’s chances on appeal just increased,” Mr. Agnifilo said in a statement.
Lawyers for Ms. Mack, Ms. Bronfman and Ms. Salzman did not respond to requests for comment.
In painstaking detail, the lawsuit explained how people with college degrees and white-collar jobs got trapped in Mr. Raniere’s system.
Membership in Nxivm was by invitation only, and before the first class, recruits were required to fill out long questionnaires about their views on wealth, religion, children and other topics.
The goal, according to the lawsuit, was to pinpoint their insecurities and weed out skeptics. One former participant said that Nxivm’s recruiters looked for “trust fund babies” and Hollywood actors, and that many Nxivm members had been survivors of sexual assault. Their fears would later be used against them if they tried to leave Nxivm.
Mr. Raniere and Ms. Salzman built a curriculum that they falsely claimed was based in science, the lawsuit alleged. The early courses conditioned students to become emotionally dependent on a system of rewards and punishment. Coaches would break down the students’ self-esteem and scold them for failing to achieve their goals, then lift them up with a positive affirmation.
“That process leaves you wanting more and feeling like they have the answers,” said a former Nxivm member who is participating in the lawsuit.
The group exploited students’ desires for validation, telling them that only Nxivm classes could fix the internal problems hindering their success. If they reached the top of Nxivm, they were told, they could earn income and build a career within the organization.
Yet the leaders continually manipulated the program requirements so that only a fraction of participants ever received income, the lawsuit said. Students were constantly pressured to take more courses and recruit other students.
Many members effectively became indentured servants for Nxivm, working for years without pay and losing their life’s savings, the plaintiffs said....
Nxivm performed illegal human experiments and falsely claimed to cure medical conditions including Tourette’s syndrome and obsessive compulsive disorder, the lawsuit alleged....
The curriculum became increasingly misogynistic over time, according to the plaintiffs. One of the programs taught women that they were sheltered from the consequences of their actions by men, and that they did not deserve equal pay because they had quit their jobs to have children. Women were to be monogamous, while men were to be polygamous, Nxivm taught.
The slow indoctrination laid the foundation for certain women to be groomed as Mr. Raniere’s sexual partners, the lawsuit alleged.....
The sentencings of Mr. Raniere and his associates by a federal judge are still months away. Mr. Raniere could face life in prison.
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