Seagram’s Liquor Heiress Charged in Nxivm Sex-Trafficking Case

NEW YORK — Clare Bronfman, an heiress to the Seagram’s liquor fortune, pleaded not guilty Tuesday in federal court in Brooklyn after her arrest on conspiracy and racketeering charges in connection with her role at Nxivm, a self-help group that prosecutors call a pyramid scheme and former members say is a cult.

Bronfman was released on a $100 million bond — roughly half of her net worth, according to her attorney, Susan Necheles — and, after a sometimes contentious hourlong bail hearing, was ordered placed under house arrest by U.S. District Judge Nicholas G. Garaufis. Bronfman will have to wear an ankle monitor at her New York apartment under the terms of her release and must return to court Friday with assets totaling $50 million to put up as security for her bail.

Bronfman was one of four people arrested in New York state Tuesday after the unsealing of an updated seven-count indictment against Keith Raniere, leader of the now defunct-group, and five others in his “inner circle,” federal prosecutors said in the indictment.

Raniere, 57, was arrested earlier this year in Mexico and brought to New York to face federal sex-trafficking charges. Prosecutors said he and one of his followers, Allison Mack, 35, an actress known for her work in “Smallville,” coerced female members to have unwanted sex with him and branded them with a symbol containing his initials. Raniere is being held without bail in Brooklyn to await trial.

As Bronfman appeared in District Court in Brooklyn, three other leaders in Nxivm (pronounced Nex-e-um) were arrested near the group’s former headquarters in Albany and brought before Magistrate Judge Daniel Stewart to answer to the charges contained in the racketeering conspiracy indictment. The judge set bail at $25,000 for Kathy Russell, Nxivm’s longtime bookkeeper, and $5 million each for its longtime president, Nancy Salzman, and her daughter, Lauren Salzman.

Bronfman is the daughter of the late liquor magnate Edgar Bronfman. She is described in the indictment as a member of Nxivm’s executive board and one of the group members “accorded special positions of trust and privilege” by Raniere for carrying out “his directives.”

Past defenders — including Bronfman, in an internet post last year — called the group a dynamic self-improvement and fellowship organization. But prosecutors maintain it was a moneymaking criminal enterprise that relied on theft, intimidation and coercion to stay afloat, even as it forced some recruits into sexual slavery.

The updated indictment charges the six defendants with money laundering, extortion, obstruction of justice, forced labor, sex trafficking, identity theft and harboring of unauthorized immigrants. But in arguing for her client’s release before trial, Necheles said none of the three charges leveled specifically at Bronfman, including identity theft and money laundering, were violent, unlike the forced-labor and sex-trafficking charges against other defendants.

Critics of Nxivm have said it was Bronfman’s millions that allowed Raniere to operate freely until his arrest in Mexico. One self-described former member, Toni Natalie, who sat in the courtroom Tuesday to watch the proceedings, said afterward that she never knew Bronfman personally. “I’ve only felt the power of her money,” she said.

“I would like them to feel the weight that they put on other people,” Natalie said, describing her 20-year involvement in Nxivm as destructive to her, although she did not elaborate. Natalie has said she is a former girlfriend of Raniere who saw him evolve from a charismatic marketing executive to a controlling leader who demanded obedience from his followers.

The hearing for Bronfman shed few new details on Nxivm’s inner workings, but offered a glimpse of her considerable wealth. Necheles said that Bronfman was worth around $200 million, with about half that amount tied up trusts supervised by Goldman Sachs, and the remainder in real estate in New York, California and Fiji, where she bought an island for $47 million.

Moira Penza, an assistant U.S. attorney, called Bronfman “a substantial flight risk” because of her resources, and asked Garaufis to keep her in custody for a few more days while prosecutors completed a review of Bronfman’s finances.

Necheles asked for bail of $25 million, with $3 million of it secured. Garaufis said that amount was too little to guarantee that Bronfman would return to court. Even though Bronfman agreed to turn over her passport, Garaufis said there was nothing stopping someone of her means from using a private plane to “fly off somewhere.”

Necheles said Bronfman would not flee over charges that carry a maximum penalty of five years in prison if convicted. Garaufis was not so sure. “I can’t place myself in the mind of someone sitting on $100 million in assets,” he said. He ordered Bronfman to appear in court Friday with one of her trust-fund advisers to finalize the bail package. Her sister, who lives in France, will also be required to put up some property as bail, the judge said.

Bronfman declined to comment to reporters as she left court, her ankle bracelet peeking from beneath the hem of her jeans.