Edmondson v. Raniere

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF NEW YORK

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SARAH EDMONDSON, TONI NATALIE,

JESSICA JOAN SALAZAR, SOUKIANA

MEHDAOUI, NICOLE, DANIELA, et al., MEMORANDUM & ORDER

20-CV-485 (EK)(CLP)

Plaintiffs,

-against-

KEITH RANIERE, CLARE BRONFMAN, SARA

BRONFMAN, ALLISON MACK, KATHY

RUSSELL, et al.,

Defendants.

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ERIC KOMITEE, United States District Judge:

Background................................................ 6

A. NXIVM’s Founding & Growth ............................... 7

B. NXIVM’s Leadership ...................................... 8

C. Criminal Prosecutions .................................. 10

Legal Standard........................................... 11

Discussion ............................................. 11

A. RICO (Count I) ......................................... 11

1. The Alleged RICO Enterprise ........................... 12

2. Effect on Interstate or Foreign Commerce .............. 14

3. Pattern of Racketeering Activity ...................... 15

a. Clare Bronfman’s Alleged Predicate Acts ............. 16

i. Immigration Fraud .................................. 16

ii. Witness Tampering ................................ 28

iii. Forced Labor, Sex Trafficking, and Human

Trafficking ...................................... 34

iv. Mail and Wire Fraud .............................. 35

v. State Law Extortion ................................ 41

b. Sara Bronfman’s Alleged Predicate Acts .............. 46

i. Immigration Fraud .................................. 46

ii. Witness Tampering ................................ 47

iii. Forced Labor, Sex Trafficking, and Human

Trafficking ...................................... 48

iv. Mail and Wire Fraud .............................. 48

4. RICO Standing ......................................... 49

i. Clare Bronfman ..................................... 51

ii. Sara Bronfman .................................... 55

B. RICO Conspiracy (Count II) ............................. 55

1. Clare Bronfman ........................................ 57

2. Sara Bronfman ......................................... 58

3. Brandon Porter ........................................ 59

4. Danielle Roberts ...................................... 60

C. Human Trafficking Under the TVPRA (Count III) .......... 62

1. The Alleged Venture ................................... 63

2. Count 3(A): Sex Trafficking and Attempted Sex

Trafficking ........................................... 64

i. Clare Bronfman ..................................... 67

ii. Danielle Roberts ................................. 72

3. Count 3(B): Conspiracy to Commit Sex Trafficking ...... 74

i. Clare Bronfman ..................................... 75

ii. Danielle Roberts ................................. 76

4. Count 3(C): Forced Labor and Human Trafficking, and

Attempted Forced Labor and Human Trafficking .......... 77

i. Clare Bronfman ..................................... 79

ii. Sara Bronfman .................................... 86

iii. Brandon Porter ................................... 87

iv. Danielle Roberts ................................. 89

5. Count 3(D): Conspiracy to Commit Forced Labor and Human

Trafficking ........................................... 90

6. Count 3(E): Document Confiscation in Furtherance of

Trafficking or Forced Labor ........................... 92

7. Count 3(F): Conspiracy to Engage in Unlawful Conduct with

Respect to Documents in Furtherance of Trafficking or

Forced Labor .......................................... 94

F. Malicious Prosecution & Abuse of Process (Count IV) .... 94

2. Abuse of Process ...................................... 96

E. Battery (Count V) ...................................... 98

H. Gross Negligence and Recklessness (Count VII) .......... 99

1. Brandon Porter ....................................... 100

2. Clare and Sara Bronfman .............................. 102

Conclusion.............................................. 102

This case concerns an Albany, New York-based

organization that billed itself as an educational enterprise.

Founded by Keith Raniere, who touted himself as a scientist,

philosopher, and humanitarian, the organization — named NXIVM —

offered courses ostensibly designed to help people reach their

full “human potential” by overcoming psychological and emotional

pitfalls. Many of its members paid thousands of dollars to

attend self-help workshops.

Some women in the NXIVM community also became involved

in a group called “DOS” — an acronym for “Dominus Obsequious

Sororium,” which the complaint in this case translates from

Latin as “lord (or master) of the obedient female companions.”

DOS was also led by Raniere, with “first-line masters” below him

and “slaves” at the bottom. When recruiting new members,

masters advertised that DOS was a women-only group — a private

sorority — and concealed Raniere’s role as its leader. To join

DOS, recruits had to provide “collateral,” which ranged from

sexually explicit photographs to letters containing damaging

accusations (whether true or false) about family members and

friends. New members also received a brand, applied with an

electrocautery device, as part of their initiation. They allege

that the brand contained Raniere’s initials, though they did not

know that prior to initiation and branding. Ultimately, DOS

members began to leave the organization and speak out.

In July of 2018, a grand jury sitting in this District

indicted Raniere and many of the other defendants to this suit,

alleging that they comprised a racketeering enterprise in

connection with NXIVM (including DOS and other affiliated

entities). Following the indictment, each of Raniere’s co-

defendants — but not Raniere himself — pleaded guilty. After a

six-week trial in 2019, a jury convicted Raniere on numerous

counts, including racketeering and racketeering conspiracy under

the Racketeer Influenced and Corrupt Organizations Act (“RICO”).

Seventy plaintiffs — all former members of NXIVM

(several of whom were also part of DOS) — now seek civil damages

for injuries that they allegedly sustained in connection with

the affairs of NXIVM. They assert claims against Raniere, Clare

Bronfman, Sara Bronfman, Allison Mack, Brandon Porter, Danielle

Roberts, Kathy Russell, and several corporate entities: NXIVM

Corporation, Executive Success Programs, Inc. (“ESP”); Ethical

Science Foundation (“ESF”); and First Principles, Inc.

(collectively, the “Entity Defendants”).1 The plaintiffs’ claims

come in two broad categories of misconduct — sex trafficking and

forced labor, on the one hand, and consumer fraud, on the other.

1 In earlier iterations of the complaint, the plaintiffs also asserted

claims against other individuals including Lauren and Nancy Salzman, but they

later dismissed those claims. Nicki Clyne is the only individual named in

the third amended complaint who has been voluntarily dismissed subsequent to

the most recent amendment. Notice of Voluntary Dismissal, ECF No. 233.

All plaintiffs assert claims for substantive and

conspiracy violations of RICO, which authorizes private civil

actions to recoup economic injuries sustained by victims of

criminal racketeering activity, against Raniere, Clare, Sara,

Mack, Russell, and the Entity Defendants.2 Nearly twenty

plaintiffs also assert claims under the Trafficking Victims

Protection Reauthorization Act (“TVPRA”) against Raniere, Clare,

Sara Bronfman, Mack, Roberts, and Russell. Further, several

plaintiffs assert New York state-law claims including battery,

malicious prosecution, and negligence.

Four individual defendants — Clare, Sara, Porter, and

Roberts — now move to dismiss the claims against them.

Meanwhile, Raniere, Mack, Russell, and the Entity Defendants,

have failed to appear. For the reasons set out below, Porter’s

motion to dismiss is granted in full, while Clare’s, Sara’s and

Roberts’s motions are granted in part and denied in part.

Background

Except as noted, the following facts (and those laid

out above) are taken from the third amended complaint (the

“complaint” or “Compl.”), ECF No. 215. When considering a

motion to dismiss, courts “must take the facts alleged in the

complaint as true.” In re NYSE Specialists Sec. Litig.,

2 To avoid confusion, this order refers to Clare and Sara Bronfman by

their first names.

503 F.3d 89, 91 (2d Cir. 2007).3 In addition, the Court takes

judicial notice of certain filings in the criminal case — United

States v. Raniere, et al., No. 18-CR-204 (NGG) (E.D.N.Y.). See

Kramer v. Time Warner Inc., 937 F.2d 767, 774 (2d Cir. 1991).

A. NXIVM’s Founding & Growth

In 1998, Keith Raniere and Nancy Salzman founded the

NXIVM organization in Albany, New York. Compl. ¶¶ 1, 24. NXIVM

sold a self-help curriculum called “Rational Inquiry,” which was

“a synthesis of psychotherapy and the teachings, methods, and

practices of the human potential movement.” Id. ¶ 25. Those

who enrolled in NXIVM’s courses were encouraged to sell the

program (books and classes setting out NXIVM’s core tenets) and

recruit new members. Id. ¶ 24. The curriculum encouraged new

members “to completely immerse themselves in the NXIVM system

and move to Albany.” Id. ¶ 27. More than 16,000 individuals

enrolled in NXIVM’s courses, id. ¶ 40; hundreds of them also

3 The second amended complaint, which was more than 200 pages and 830

paragraphs, provided virtually no indication of which facts were proffered in

support of which causes of action, and asserted several claims “against All

Defendants on behalf of all [seventy-six] Plaintiffs” with no specific

allegations as to each defendant’s role. See, e.g., Second Am. Compl. ¶ 790,

ECF No. 159 (“The Individual Defendants participated in the scheme or

artifice to defraud knowingly, willfully, and with the specific intent to

deceive and/or defraud Plaintiffs into paying for NXIVM programs.”). During

oral argument in February of 2023, the Court invited the plaintiffs to

streamline the complaint, following which they submitted a third amended

complaint comprising 111 pages and 332 numbered paragraphs (substantially

shorter, but still sprawling). Though marginally more manageable than its

predecessor, the new complaint still required the Court to engage in

painstaking efforts to identify the facts alleged in support of each claim,

often hundreds of paragraphs apart from each other.

moved to Albany to live among fellow “Nxians,” as members called

themselves. Id. ¶ 27.

Over time, NXVIM grew into a multi-pronged umbrella

organization. It contained several legal entities, including

the NXIVM Corporation, the various Entity Defendants, see supra,

and Rainbow Cultural Garden (“RCG”), purportedly a childcare

program. Id. ¶¶ 2, 15, 30. It was also comprised of several

internally named organizations and groups with no separate legal

status; these included DOS as well as “exo / eso” (a “bodywork

program marketed to athletes, fitness enthusiasts, and yoga

practitioners”) and “Ultima” (which subsumed other groups

including “The Knife,” a “purported news outlet”). Id. ¶¶ 2,

93, 94, 102.

B. NXIVM’s Leadership

Raniere and Nancy Salzman worked closely with a group

of individuals — referred to in the complaint as Raniere’s

“inner circle” — to manage NXIVM’s affairs. Id. ¶ 3. In

addition to Nancy Salzman, the inner circle consisted of Clare

Bronfman, Sara Bronfman, Nicki Clyne, Allison Mack, Kathy

Russell, and Lauren Salzman (Nancy’s daughter). Id.

Sara joined NXIVM in 2001 and later served on its

Executive Board. Id. ¶¶ 28, 30. She also served as Senior

Executive of Executive Success Programs, head of RCG, and co-

founded the Ethical Science Foundation (“ESF”). Id. ¶ 30.

Further, she founded NXIVM’s so-called “VIP Programs,” which

recruited powerful and prominent individuals, including the

Dalai Lama, to appear at NXIVM events. Id. ¶¶ 30, 33. For a

time, she detailed her extensive involvement in NXIVM’s affairs

on her personal blog. See id. ¶ 30 (quoting

www.sarabronfman.com).

At Sara’s urging, her sister Clare joined NXIVM in

2004. Id. ¶ 29. Clare, too, eventually became a member of

NXIVM’s Executive Board. She also served as Vice President of

Operations and Board Member of Executive Success Programs, and

as Trustee and Chief Operating Officer of the Ethical Science

Foundation, which she co-founded. Id. ¶ 31. Clare “directed

and ran virtually every aspect of the NXIVM operation, including

overseeing its financial, legal, administrative, and accounting

operations.” Id. While serving in these leadership roles, she

maintained a “close relationship” with Raniere. Id. ¶ 34.

Together, Clare and Sara Bronfman provided NXIVM and

its related entities with more than $100 million in funding.

Id. The complaint characterizes them as “Raniere’s primary

backers and funders and his most trusted advisors and

confidants.” Id. ¶ 36.

Allison Mack was a senior leader of DOS, serving as a

so-called “first-line master.” Id. ¶ 12. As set forth in more

detail below, she is alleged to have extorted several plaintiffs

and to have participated in sex trafficking and forced-labor

violations.

Finally, Kathy Russell served as NXIVM’s bookkeeper

for more than a decade. Id. ¶ 14. She “worked directly with

Raniere and other NXIVM leaders.” Id. She is alleged to have

aided and abetted immigration fraud, id. ¶ 229, and to have

committed forced labor, sex trafficking, and human trafficking,

id. ¶ 266, and visa fraud. Id. ¶ 228.

C. Criminal Prosecutions

Following the 2018 indictment, each of Raniere’s co-

defendants entered guilty pleas, as discussed above. Clare

pleaded guilty to identity theft and immigration fraud

conspiracy. She was sentenced to eighty-one months’

incarceration. See Judgment as to Clare, United States v.

Raniere, No. 18-CR-204 (NGG), ECF No. 946 (E.D.N.Y. Oct. 7,

2020). Mack pleaded guilty to racketeering and racketeering

conspiracy. She received a thirty-six-month sentence. See

Judgment as to Allison Mack, United States v. Raniere, id., ECF

No. 1086 (E.D.N.Y. July 28, 2021). Finally, Russell pleaded

guilty to visa fraud and received two years’ probation. See

Judgment as to Kathy Russell, id., ECF No. 1153 (E.D.N.Y. Nov.

5, 2021). Sara Bronfman was not charged.

Raniere himself was convicted after trial on all

counts on which he was indicted, including racketeering and

racketeering conspiracy, forced labor conspiracy, wire fraud

conspiracy, sex trafficking conspiracy, sex trafficking, and

attempted sex trafficking. He was sentenced to 120 years in

prison. See Judgment as to Keith Raniere, United States v.

Raniere, No. 18-CR-204 (NGG), ECF No. 969 (E.D.N.Y. 2020).

Legal Standard

On a motion to dismiss under Rule 12(b)(6), “the

court’s task is to assess the legal feasibility of the

complaint.” Lynch v. City of New York, 952 F.3d 67, 75 (2d Cir.

2020).4 To survive a motion to dismiss, a complaint must contain

sufficient factual matter, accepted as true, to “state a claim

to relief that is plausible on its face.” Ashcroft v. Iqbal,

556 U.S. 662, 678 (2009). Courts “are not bound to accept as

true a legal conclusion couched as a factual allegation,” and

“[t]hreadbare recitals of the elements of a cause of action,

supported by mere conclusory statements, do not suffice.” Id.

Discussion

A. RICO (Count I)

All plaintiffs assert civil claims under the RICO

statute, 18 U.S.C. § 1964(c), against Raniere, Clare, Sara,

Mack, Russell, and the Entity Defendants. To prevail on a civil

RICO claim, “plaintiffs must show (1) a substantive RICO

4 Unless otherwise noted, when quoting judicial decisions this order

accepts all alterations and omits all citations, footnotes, and internal

quotation marks.

violation under 18 U.S.C. § 1962, (2) injury to the plaintiff’s

business or property, and (3) that such injury was by reason of

the substantive RICO violation.” Sykes v. Mel S. Harris &

Assocs. LLC, 780 F.3d 70, 83 (2d Cir. 2015).

To establish that first element — the substantive RICO

violation — under Section 1962(c), as the plaintiffs attempt to

do here, the complaint “must allege the existence of seven

constituent elements: (1) that the defendant (2) through the

commission of two or more acts (3) constituting a pattern (4) of

racketeering activity (5) directly or indirectly invests in, or

maintains an interest in, or participates in (6) an enterprise

(7) the activities of which affect interstate or foreign

commerce.” Moss v. Morgan Stanley Inc., 719 F.2d 5, 17 (2d Cir.

1983). A plaintiff must establish each of these elements “as to

each individual defendant.” DeFalco v. Bernas, 244 F.3d 286,

306 (2d Cir. 2001).

1. The Alleged RICO Enterprise

A RICO “enterprise” under 18 U.S.C. § 1961 can be “any

union or group of individuals associated in fact although not a

legal entity.” The plaintiffs assert that Raniere and his

so-called “inner circle” operated such an “association-in-fact”

RICO enterprise in conducting the affairs of NXIVM. See Compl.

¶¶ 198-99. Per the Supreme Court, “an association-in-fact

enterprise is simply a continuing unit that functions with a

common purpose.” Boyle v. United States, 556 U.S. 938, 948

(2009).

The alleged enterprise must therefore have “at least

three structural features: a purpose, relationships among those

associated with the enterprise, and longevity sufficient to

permit these associates to pursue the enterprise’s purpose.”

Id. at 946. But it “need not have a hierarchical structure or a

chain of command,” and “[m]embers of the group need not have

fixed roles.” Id. at 948. Nor must it have “regular meetings,

dues, established rules and regulations, disciplinary

procedures, or induction or initiation ceremonies.” Id.5

The complaint adequately alleges that Raniere and his

so-called inner circle — also referred to as “NXIVM’s

leadership” — operated as an association-in-fact. First, the

plaintiffs have adequately alleged that this group — comprising

the individual defendants and Lauren and Nancy Salzman —

maintained relationships with one another, as Boyle requires.

The complaint recites that these individuals “knew each other

personally and were intimately involved in all aspects of” the

enterprise, id. ¶ 3, and it identifies the roles that each

served therein. See, e.g., id. ¶¶ 10-14, 30-31, 168. Second,

5 As the Supreme Court noted in Boyle, the RICO statute is, by its own

terms, to be “liberally construed to effectuate its remedial purposes.” 556

U.S. at 944 (citing the Organized Crime Control Act of 1970, Pub. L. No. 91–

452, § 904(a), 84 Stat. 941, 947 (1970)).

the complaint sufficiently alleges a number of common purposes

among NXIVM’s senior leadership.6 These purposes include: “to

enrich Raniere and themselves with money and social power by

expanding and strengthening the NXIVM community to, among other

things, sell curricul[a], cultivate a pool of foreign laborers

to support the Enterprise, and groom women for sexual conduct

with and for Raniere.” Id. ¶ 199. At this stage, those

purposes (and the complaint’s factual content pled in support)

suffice for this element.7 Finally, the plaintiffs have

adequately alleged that the enterprise existed for a sufficient

duration. Specifically, they allege that the enterprise

operated from its founding in 1998 to approximately 2017, when

it “began to collapse.” Id. ¶¶ 2, 6, 199.8

2. Effect on Interstate or Foreign Commerce

The complaint also adequately alleges that the

enterprise engaged in, or that its activities affected,

interstate or foreign commerce. “[C]onduct having even a de

6 RICO does not require this shared purpose to be an “economic motive.”

National Organization for Women, Inc. v. Scheidler, 510 U.S. 249, 252 (1994)

(permitting civil RICO claims aimed at an enterprise whose “aim [was] to shut

down [abortion] clinics and persuade women not to have abortions”).

7 See, e.g., United States v. Raniere, 2022 WL 17544087, *4 (2d Cir.

Dec. 9, 2022) (summary order) (holding that Raniere’s “‘inner circle’ was an

enterprise for the purposes of the RICO statute” and that it had a common

purpose that included recruiting victims into DOS and thereby garnering for

its members “increased power and status within the Enterprise”).

8 It is not required that all members of a RICO enterprise became

members at its inception; they can join the enterprise alone the way. United

States v. Gershman, 31 F.4th 80, 98-99 (2d Cir. 2022) (a RICO “enterprise may

continue to exist even though it undergoes changes in membership” and it

“therefore does not matter” that a key member of an enterprise joined “after

other members had already begun associating with each other”).

minimis effect on interstate commerce suffices” to satisfy this

element. United States v. Mejia, 545 F.3d 179, 203 (2d Cir.

2008). The plaintiffs allege that “[t]he Enterprise engaged in,

and conducted activities which affected, interstate and foreign

commerce, including operating NXIVM and [Rainbow Cultural

Garden] centers in several states across the country, Canada,

and Mexico, as well as enticing American recruits and foreigners

to travel across state and international borders to New York.”

Compl. ¶ 200. Considering these allegations, and the

allegations regarding the sale of NXIVM’s curriculum, see id.

¶¶ 4, 26, the complaint adequately pleads this element.

3. Pattern of Racketeering Activity

To satisfy the pleading requirement that a defendant

engaged in a “pattern of racketeering activity,” a plaintiff

must allege that each defendant “personally committed” two or

more predicate acts of “racketeering activity.” McLaughlin v.

Anderson, 962 F.2d 187, 192 (2d Cir. 1992); see also 18 U.S.C.

§ 1961(5). The RICO statute “broadly define[s]” racketeering

activity to encompass a variety of state and federal offenses,

including mail and wire fraud and extortion. DeFalco v. Bernas,

244 F.3d 286, 306, 308 (2d Cir. 2001). The predicate acts “must

be related to each other (‘horizontal’ relatedness), and they

must be related to the enterprise (‘vertical’ relatedness).”

United States v. Daidone, 471 F.3d 371, 375 (2d Cir. 2006). Yet

“proof of these separate elements need not be distinct and

independent, as long as the proof offered is sufficient to

satisfy both elements.” Id. at 376. Such proof may include

that the predicate acts shared “common goals” and “common

victims,” and involved “participants from the same pool of

associates (who are members and associates of the enterprise).”

Id.

As set forth below, the complaint adequately alleges

that both Clare and Sara committed two predicate acts.

a. Clare Bronfman’s Alleged Predicate Acts

The plaintiffs allege that Clare committed predicate

acts in five categories: (1) immigration fraud; (2) witness

tampering; (3) forced labor, sex trafficking, and human

trafficking; (4) mail and wire fraud; and (5) extortion under

New York law. The plaintiffs have adequately alleged that Clare

committed one act of immigration fraud and one act of mail and

wire fraud. They have failed, however, to plead the other

alleged predicates sufficiently.

i. Immigration Fraud

The plaintiffs contend that Clare committed several

violations of 8 U.S.C. § 1324(a)(1)(A)(iii)-(v) to obtain

financial gain in connection with plaintiffs Lindsay MacInnis,

Adrian, Camila, Daniela, and Maja Miljkovich. Compl. ¶¶ 205-06.9

Under Section 1324(a)(1)(A)(iii), it is a crime to conceal,

harbor, or shield from detection an alien, “knowing or in

reckless disregard of the fact that [such] alien has come to,

entered, or remains in the United States in violation of law.”

The Second Circuit has held that to constitute “harboring” under

Section 1324, “a defendant’s action must be intended (1)

substantially to facilitate an illegal alien’s remaining in the

United States” — e.g., by providing “shelter, money, or other

material comfort” — and “(2) to prevent the alien’s detection by

immigration authorities.” United States v. George, 779 F.3d

113, 118 (2d Cir. 2015).

Section 1324(a)(1)(A)(iv), for its part, establishes

criminal liability for any person who “encourages or induces an

alien to come to, enter, or reside in the United States, knowing

or in reckless disregard of the fact that such coming to, entry,

or residence is or will be in violation of law.” In rejecting a

First Amendment overbreadth challenge to this provision, the

Supreme Court read “encourages or induces” in the phrase’s

“specialized, criminal-law sense — that is, as incorporating

common-law liability for solicitation and facilitation.” United

9 Several plaintiffs, including Adrian, Camila, and Daniela, are

identified only by their first names for the reasons set forth in this

Court’s order of February 11, 2022. See Prelim. Order of Protection, ECF No.

141.

States v. Hansen, 599 U.S. 762, 774 (2023). “Criminal

solicitation is the intentional encouragement of an unlawful

act,” and “[f]acilitation — also called aiding and abetting — is

the provision of assistance to a wrongdoer with the intent to

further an offense’s commission.” Id. at 771. But neither

solicitation nor facilitation “require[] lending physical aid;

for both, words may be enough,” so long as they are driven by

the “intent to bring about a particular unlawful act.” Id.

A violation of either subsection qualifies as a RICO

predicate if the offense “was committed for the purpose of

financial gain.” 18 U.S.C. § 1961(1)(F). In the context of

Section 1324 itself, which establishes higher penalties for

violations “done for the purpose of commercial advantage or

financial gain,” id. § 1324(a)(1)(B)(i), the Second Circuit has

suggested that the phrase “financial gain” should be given its

ordinary meaning. See United States v. Kim, 193 F.3d 567, 576–

77 (2d Cir. 1999) (“The phrases ‘commercial advantage’ and

‘financial gain’ are not defined in the statute or the

Application Notes, but their meanings are hardly arcane.”).

While the Circuit did not further define financial gain —

perhaps believing it self-explanatory — it discussed the “usual

meaning” of the words “commercial” (“relating to commerce” or

“having profit as the primary aim”) and “advantage” (“a benefit,

profit, or gain of any kind”). Id. at 577 (quoting Webster’s

Third New International Dictionary, 456 (1976)). The court

later explained — again with respect to Section 1324 — that no

actual gain or advantage need be obtained; the statute “merely

requires that the defendant acted for the purpose of financial

gain.” United States v. Kim, 435 F.3d 182, 185 (2d Cir. 2006).

While it is a close call, the complaint adequately

alleges that Clare committed such offenses with respect to one

of the five plaintiffs: Adrian. It fails to plead sufficient

facts to suggest Section 1324 violations involving the other

four: Lindsay MacInnis,10 Maja Miljkovic, Camila, and Daniela.11

Adrian. First, the plaintiffs adequately allege that

Clare solicited Adrian to continue residing in the United States

“with the intent to further” his illegal residence, Hansen, 599

U.S. at 771, in violation of Section 1324(a)(1)(A)(iv). They

further allege that Clare did so for the purpose of financial

gain.

According to the complaint, Adrian was a “foreign

national who lived and worked in the NXIVM community.” Compl.

¶ 68. The complaint indicates that Adrian had a valid visa for

10 Clare Bronfman’s supplemental memorandum in support of her motion to

dismiss spells Lindsay’s last name “MakInnis.” Clare’s Supp. Mem. at 16, ECF

No. 226. This order adopts the spelling used by the plaintiffs throughout

their complaint, “MacInnis.” E.g., Compl. ¶ 57.

11 Clare Bronfman pled guilty to one count of conspiracy to violate

Section 1324 with respect to a “Jane Doe 12,” whose name was not revealed

publicly. Case No. 18-CR-204, ECF No. 936 at 2 (E.D.N.Y. 2020). The

complaint in this case does not purport to identify Jane Doe 12.

legal residence in the United States, although it does not

specify when that visa took effect. See id. ¶¶ 68-69.

Initially, Adrian performed manual labor for Clare in her barn,

for which he was “rarely compensated.” Id. ¶ 68. Eventually,

he “complained that he was unable to support himself” and that

he therefore “planned to leave NXIVM and return to Mexico.” Id.

When Raniere heard that Adrian planned to return to

Mexico because he “was unable to support himself,” he “told

Adrian that Adrian could build a company” with him and Clare.

Id. Adrian accepted the offer, working “tirelessly” to build a

profitable company, including by investing his own money into

it. Id. When Adrian’s visa was expiring, he informed Raniere

and Clare “that he was returning to Mexico, to wait the

requisite period, and apply to renew his visa.” Id. ¶ 69. They

“persuaded him not to leave the U.S. because their lawyers could

resolve the immigration issue.” Id. Relying on that assurance,

Adrian continued to reside in the United States and to work on

the t-shirt business without pay. Id. ¶¶ 68-69. But the

assurance never bore fruit, and Adrian eventually “los[t] his

lawful immigration status.” Id. When the Albany Times Union

published articles about NXIVM, Clare — worried about the

negative press — “told Adrian to go into hiding so that he would

not be discovered by reporters or immigration authorities.” Id.

¶ 70.

The complaint does not provide further detail on what,

precisely, Clare actually said about going “into hiding.” At

the pleading stage, however, this claim is sufficiently well-

defined to proceed. See generally Woodhull Freedom Found. v.

United States, 72 F.4th 1286, 1301 & n.5 (D.C. Cir. 2023)

(citing Model Penal Code § 5.02(1)).

Lindsay MacInnis. The complaint alleges that Clare

also induced MacInnis — a Canadian national — to come to the

United States, and then encouraged her to remain here, despite

knowing that such residence would be unlawful. This predicate

act is inadequately pleaded because the complaint does not

assert plausibly (or at all, really) that MacInnis’s residence

was or would be unlawful.

The complaint alleges that “Raniere and Clare lured”

MacInnis to the United States by “assuring her that she would

receive gainful employment in the NXIVM community.” Id. ¶ 76.

The complaint acknowledges that MacInnis entered the United

States with a valid visa. Id. To facilitate MacInnis’s

residence in the United States, “Clare sent letters to

immigration authorities on NXIVM’s behalf representing that

Linday [] would work for NXIVM as [a] ‘business consultant[]’

and would be given a salary satisfying the requirements for a

visa.” Id. But when MacInnis arrived and began work “as

Clare’s ‘personal assistant’ she was not paid what she had been

promised or a salary sufficient to satisfy the requirements of

her visa.” Id. Clare told her that to make more money “she

needed to take more curriculum.” Id. For a time, “Lindsay was

forced to comply with Clare’s demands because of her immigration

status.” Id. Eventually, in response to the lack of pay,

“Lindsay fled to Canada.” Id. ¶ 77.

These allegations fail to address a crucial element of

Section 1324 — that MacInnis’s residence in the United States be

“in violation of law.” 8 U.S.C. § 1324(a)(1)(A). Nor,

consequently, does the complaint allege that Clare knew, or

acted in reckless disregard of the fact that, MacInnis would be

residing in the country illegally. Id. Instead, plaintiffs

suggest (obliquely) that Clare resorted to fraud to obtain

continued lawful immigration status for MacInnis.12 But the

complaint does not explain when or how MacInnis’s residence in

the United States would have been unlawful — the plaintiffs do

not allege, for example, that MacInnis’s work visa had expired

or become invalid, or that Clare told her to stay on even after

it did.13 Compl. ¶ 77. In the absence such allegations, the

12 Such an act might constitute visa fraud under 18 U.S.C. § 1546, but

while the complaint alleges that Kathy Russell committed visa fraud as one of

her predicate acts, see Compl. ¶ 226, it fails to make such an allegation

against Clare, see id. ¶¶ 203-212.

13 A visa holder in H1-B status may lose that status if they are

terminated from a job, but only after a grace period. Plaintiffs do not

allege that MacInnis lost her job — only that it did not meet her

compensation expectations. The complaint does not allege any specific

immigration implications of these allegations. Indeed, the complaint does

not say what type of work visa MacInnis held.

complaint fails to adequately allege of violation of Section

1324 as to MacInnis.

Maja Miljkovic. The allegation that Clare harbored

Maja Miljkovic in violation of Section 1324(a)(1)(A)(iii) for

the purpose of financial gain is likewise inadequately pleaded.

“Maja entered the U.S. on a visitor visa” and joined

the NXIVM community. Compl. ¶ 78. Although “Raniere and Clare

told her that she would create and own a NXIVM company from

which she would earn income . . . she was never compensated for

her work” for the “Knife of Aristotle,” a “purported news

outlet” under the NXIVM umbrella. Id. ¶¶ 79, 102. The

complaint does not expand on Miljkovic’s role at the Knife of

Aristotle, whether her promised ownership stake ever came into

fruition, or her precise employment relationship with the

company, other than to say that she was “recruited to develop”

it and that she was never paid for doing so. Id. ¶ 79.14

Instead, “to cover her living expenses and because Maja was

unable to work anywhere else because of her visa status,”

Bronfman “paid Maja to work as a waitress at a cafe” that

Bronfman owned; the pay was “meager.” Id.

14 People who “own” companies, as Miljkovic was allegedly promised she

would, typically expect to earn money through the company’s profits, rather

than a fixed income. This basic tenet is at odds (or at least in tension)

with the complaint’s bare assertion that Clare’s promise of income was false

when made.

According to the complaint, when Miljkovic eventually

announced that she was “leaving the NXIVM community” to

“return[] to Canada,” “Raniere and Clare then pressured Maja to

marry Marc Elliot so Maja could remain in the U.S. and Maja

agreed.” Id. But the complaint proffers no details on how

Clare “pressured” her. It merely alleges that Raniere (not

Bronfman) “told [Miljkovic] that many people in the NXIVM

community had entered into sham marriages” in order to stay in

the United States. Id.

Allegations of sham marriage can be sufficient to

state a claim for harboring. The Second Circuit has held that

the “arrangement of sham marriage ceremonies to United States

citizens for the purpose of enabling the aliens to claim

citizenship” sufficed (with other evidence) to prove “harboring”

under Section 1324. United States v. Lopez, 521 F.2d 437, 441

(2d Cir. 1975); see also Hansen, 599 U.S. at 782 (identifying

“arranging fraudulent marriages” as an example of the statute’s

“plainly legitimate sweep”).

Here, however, the complaint sets forth insufficient

factual content to support the inference that Miljkovic’s

marriage was a sham and that Clare knew as much. The vague

allegation that Raniere and Bronfman “pressured” Miljkovic to

marry Marc Elliot does not suffice. Cf., e.g., Kassner v. 2nd

Avenue Delicatessen Inc., 496 F.3d 229, 241 (2d Cir. 2007) (in

employment case, allegation “that defendants pressured

plaintiffs to retire” was insufficient to state a claim absent

“specific facts as to what was done to pressure [plaintiffs] to

retire”). Absent plausible factual content, this predicate act

allegation cannot suffice.

Camila. The complaint also charges Clare with two

immigration predicates relating to Camila: first, that Clare

concealed or harbored Camila in violation of Section

1324(a)(1)(A)(iv); and second, and that she aided and abetted an

“encouragement” or “inducement” violation of Section

1324(a)(1)(A)(iii), or conspired with others to commit that

offense. Compl. ¶¶ 206-07. These allegations, too, however,

are inadequately pleaded.

At some time, “Raniere informed Camila that she no

longer needed to return to Mexico to renew her visa because

Clare Bronfman’s immigration lawyers had a better way for her to

remain in the U.S. Camila followed that advice and overstayed

her visa, losing her lawful immigration status.” Id. at ¶ 72.

Further, the plaintiffs allege that Camila “repeatedly asked

members of the Inner Circle about her status, but they did

nothing but string her along, assuring her that Clare Bronfman

was handling it.” Id. “Clare knew of Camila’s immigration

status,” they submit, because “she had orchestrated immigration

fraud for NXIVM, including as to Adrian (Camila’s brother);

members of the Inner Circle and the legal team were aware of

Camila’s immigration status; and Clare was personally familiar

with Camila, who worked for RCG.” Id. The complaint alleges

that Clare (along with Sara Bronfman) “operated and financed

RCG,” “which was used as a vehicle . . . to fraudulently obtain

foreign labor.” Id. ¶ 215.

These conclusory allegations fail to raise a plausible

inference that Clare encouraged or induced Camila to reside in

the United States despite knowing that such residence would be

unlawful (or that she aided and abetted, or conspired with,

others to do so). While the complaint alleges that Clare knew

Camila, it proffers no facts that would satisfy the actus reus

element of these violations — that is, it does not say that

Clare did anything at all in respect of these allegations.

The allegation that other individuals told Camila that

Clare was “handling” the issue of her immigration status does

support an inference of Clare’s action (or agreement to act).

Moreover, the complaint suggests a fairly strained basis for

inferring Clare’s knowledge of Camila’s immigration status:

because she knew Camila, and had “orchestrated” Camila’s

brother’s immigration fraud. These allegations, taken together,

are insufficient to support the plausible inference that Clare

committed, aided and abetted, or conspired to commit a violation

of Section 1324 in Camila’s case. See United States v. Pipola,

83 F.3d 556, 562 (2d Cir. 1996) (aiding and abetting requires

“the specific intent of advancing the commission of the

underlying crime”); United States v. Mahaffy, 693 F.3d 113, 123

(2d Cir. 2012) (conspiracy requires showing, among other things,

that the defendant “knowingly engaged in the conspiracy with the

specific intent to commit the offenses that were the objects of

the conspiracy”).

Daniela. Finally, the complaint asserts that Clare

committed a direct violation of Section 1324(a)(1)(A)(iv) with

respect to plaintiff Daniela — and that she aided and abetted,

and conspired with, Raniere, Sara Bronfman, and Russell to

violate Section 1324(a)(1)(A)(iii) in Daniela’s case. Compl.

¶¶ 206-07. The complaint proffers no facts to support these

claims. While it alleges that at some point, “Daniela asked

Raniere for help from Clare’s attorneys regarding her

immigration status; she was ignored,” id. ¶ 75, that allegation

provides no basis to conclude that Clare herself knew that

Daniela was residing in the United States illegally.

The complaint also alleges — again without factual

support — that Clare served as Raniere’s “agent” in the

confiscation of Daniela’s immigration papers (specifically, “her

passport and other documents that proved her identity and

country of origin”), see id. ¶¶ 75, 293-94, as discussed in

Section III.C.6, infra. But the plaintiffs set forth no facts

about Bronfman’s alleged role in, or even knowledge of, that

document confiscation. Nor do they make any non-conclusory

allegations suggesting that Clare knew about Daniela’s unlawful

status. In fact, the complaint specifically alleges that

Raniere alone confiscated Daniela’s documents: “Raniere confined

her to a room and confiscated her passport and other documents

that proved her identity and country of origin.” Id. ¶ 75. The

allegation that Clare was Raniere’s “agent” in this regard is a

legal conclusion. See Ashcroft, 556 U.S. at 678 (“[W]e must

take all the factual allegations in the complaint as true, [but]

we are not bound to accept as true a legal conclusion couched as

a factual allegation.”). In any event, principals are

responsible for the acts of their agents, but the reverse is not

also true.

Accordingly, the complaint fails to raise a plausible

inference that Clare committed, aided and abetted, or conspired

to commit a violation of Section 1324 with respect to Daniela.

ii. Witness Tampering

The plaintiffs also allege that Clare committed

witness tampering, in violation of 18 U.S.C. § 1512(b), with

respect to Jessica Salazar, Soukiana Medhaoui, Sarah Edmondson,

and Camila. Section 1512(b) makes criminally liable any person

who:

knowingly uses intimidation, threatens, or corruptly

persuades another person, or attempts to do so, or

engages in misleading conduct toward another person,

with intent to: (1) influence, delay, or prevent the

testimony of any person in an official proceeding; (2)

cause or induce any person to (A) withhold testimony,

or withhold a record, document, or other object, from

an official proceeding; . . . or (3) hinder, delay, or

prevent the communication to a law enforcement officer

. . . of information relating to the commission or

possible commission of a Federal offense.

Id. An act of persuasion is “corrupt[]” when it is “motivated

by an improper purpose” — that is, when it is done in

furtherance of some “constitutionally unprotected and

purportedly illicit activity,” such as “preventing through

violence [a person’s] cooperation with law enforcement.” United

States v. Veliz, 800 F.3d 63, 70 (2d Cir. 2015). However,

neither “threats of future litigation, [n]or the initiation of

actual litigation, constitute witness tampering.” G-I Holdings,

Inc. v. Baron & Budd, 179 F. Supp. 2d 233, 266 (2d Cir. 2001).

Jessica Salazar & Soukiana Medhaoui. The plaintiffs

allege that “Clare . . . retained two attorneys” who “sent

letters — written by Raniere and Clare and transposed on law

firm letterhead — to victim-witnesses, threatening them with

legal action and arrest on criminal charges if they did not

remain silent about DOS and NXIVM.” Compl. ¶ 171. Further,

they allege that “[m]etadata recovered by the government

established that at least one of the threatening, extortive

letters sent to a DOS victim came from a document created by

Clare,” and that “[a]mong the recipients of these threatening

letters were Plaintiffs Salazar and Medhaoui.” Id. ¶ 173.

One such threatening letter allegedly suggested,

albeit confusingly, that it came from a prosecutor. The letter

was written on a law firm’s letterhead — that of “Olmeda Gaxiola

& Abogados, S.C.” — but also described the writer as the “chief

attorney of a criminal investigation in Mexico.” United States

v. Raniere, Case No. 18-CR-204 (NGG), ECF No. 922-1, at 4. It

stated that the addressees — including Salazar and Medhaoui,

Compl. ¶ 173 — were “currently connected to several criminal

investigations involving fraud, coercion, extortion,

harassment,” and a slew of other crimes. United States v.

Raniere, Case No. 18-CR-204 (NGG), ECF No. 922-1, at 4.

The complaint does not adequately allege a violation

of Section 1512(b) by Clare against either Salazar or Medhaoui

because it fails to allege the “official proceeding” element of

subsections (b)(1) and (b)(2). To violate Section 1512(b), the

defendant must “have in contemplation [some] particular official

proceeding” towards which the obstructive act is directed, even

if that particular proceeding is not yet pending. Arthur

Andersen LLP v. United States, 544 U.S. 696, 708 (2005). In the

Andersen case, the Supreme Court held that jury instructions on

the “corruptly persuades” element of Section 1512 must “convey

the requisite consciousness of wrongdoing.” Id. The section

cannot apply to “someone who persuades others to shred documents

under a document retention policy when he does not have in

contemplation any particular official proceeding in which those

documents might be material.” Id. at 707-8 (emphasis added).15

Neither the complaint nor the letter itself identify

any particular official proceeding as to which Clare was

attempting to hinder Salazar’s or Medhaoui’s participation. The

complaint does not, for example, allege that she was attempting

to prevent their testimony before the grand jury that ultimately

returned an indictment against her, or even that she was

attempting to prevent their cooperation with an ongoing or

foreseeable law enforcement investigation.

The “criminal investigation” referred to in the

Abogados’ letter does not qualify. For starters, the complaint

does not allege that any such investigation actually existed.

Moreover, the definition of “official proceeding” under Section

1512 is not limitless. An “official proceeding” is “a

proceeding before a judge or court of the United States”

(including non-Article III courts), “a Federal grand jury,” “a

proceeding before the Congress, a proceeding before a Federal

Government agency which is authorized by law,” or proceedings

“involving the business of insurance.” 18 U.S.C. § 1515(a)(1);

15 Plaintiffs do not invoke 18 U.S.C. § 1512(c) in support of this

claim.

see also United States v. Ermoian, 752 F.3d 1165, 1170 (9th Cir.

2013) (holding that “a criminal investigation is not an

‘official proceeding’ under the obstruction of justice statute,”

as the term “connotes some type of formal hearing”). Foreign

proceedings do not qualify, either. El Omari v. Buchanan, No.

22-55, 2022 WL 4454536, at *1-2 (2d Cir. 2022) (“For purposes of

this statute, an ‘official proceeding’ is defined to include

only specified domestic proceedings.”).

Indeed, the letter at issue is primarily directed at

minimizing media exposure, rather than witness testimony. It

“strongly suggest[s] that [the recipients] cease and desist,

undo, reverse, cancel, and retract, participation in all past,

present, and future, conversation, conference calls, meetings,

news media, social media, blogs, or websites.” United States v.

Raniere, Case No. 18-CR-204 (NGG), ECF No. 922-1, at 4. It

recommends that “[y]our best course of action is to minimize

your exposure.” Id. But rather recommending the same course of

action as to any law enforcement inquiry, the letter advises

recipients to “fully cooperat[e] with the criminal

investigations.” Id.

Sarah Edmondson. The complaint also fails to

adequately allege that Clare committed witness tampering with

respect to Sarah Edmondson. The plaintiffs allege the same

facts that Judge Garaufis found at Clare’s sentencing — that

Clare “pursu[ed] false criminal charges against Plaintiffs

Edmondson and Kobelt in Vancouver” “in response to the

forthcoming New York Times exposé” of NXIVM. Compl. ¶ 175.

Section 1515’s definition of “official proceeding”

refers only to proceedings in the United States; Canadian

proceedings do not suffice. See 18 U.S.C. § 1515(a)(1)(A)

(referring to proceedings before courts “of the United States”).

But in any event, as with Salazar and Medhaoui above, the

complaint alleges no nexus between Clare’s false complaint and

“any particular proceeding,” let alone a domestic one. Arthur

Andersen, 544 U.S. at 707.

Camila. The complaint alleges that when the FBI

contacted Camila in March 2019, Camila reached out to “an

associate of Clare Bronfman who told her not to speak with the

FBI.” Compl. ¶ 179. It alleges that “Clare Bronfman arranged

for Camila to hire an attorney” from a list provided, who would

be paid by Clare. Id. Once hired, that attorney “instructed

Camila not to speak to the FBI or a victim specialist.” Id.

When Camila told the attorney that she wanted to speak with the

FBI, the attorney initially responded that “she (the attorney)

would confer with prosecutors and ascertain whether they viewed

Camila as a perpetrator or a victim.” Id. But the attorney

never actually contacted the FBI, and later told Camila that she

would not do so “because the FBI would use its resources to

locate Camila and charge her with crimes.” Id.

Here, too, the complaint fails to allege the

foreseeability of any “official proceeding,” invoking instead

only the prospect of Camila “speak[ing] to the FBI.” Again,

however, ”a criminal investigation is not an ‘official

proceeding’ under the obstruction of justice statute” because

the term specifically “connotes some type of formal hearing.”

Ermoian, 752 F.3d at 1170; see Fischer v. United States, 144

S.Ct. 2176, 2200 (2024) (Barrett, J., dissenting) (citing

appellate decisions to this effect). And beyond that, the

plaintiffs fail to allege that Clare herself engaged in

obstructive conduct, or even that she directed the attorney she

allegedly paid for to do so. The complaint thus fails to state

a claim under Section 1512(b) as to Camila.

iii. Forced Labor, Sex Trafficking, and Human

Trafficking

The plaintiffs have not adequately alleged that Clare

has committed any forced labor, sex trafficking, or human

trafficking offense. This is true for the reasons set forth in

Section III.C.1, infra — generally, that they insufficiently

allege Clare’s actual knowledge of Raniere’s conduct.

Therefore, those alleged offenses cannot serve as a predicate

act for purposes of this RICO claim.

iv. Mail and Wire Fraud

For their next predicate acts, the plaintiffs allege

that “Clare committed directly, aided and abetted the commission

of, and conspired to commit multiple acts of mail and wire fraud

in violation of 18 U.S.C. §§ 1341, 1343.” Compl. ¶ 210. These

allegations relate primarily to the sale of NXIVM courses.

“The elements of mail or wire fraud are (i) a scheme

to defraud (ii) to get money or property (iii) furthered by the

use of interstate mail or wires.” Williams v. Affinion Grp.,

LLC, 889 F.3d 116, 124 (2d Cir. 2018). “A scheme to defraud is

a plan to deprive a person of something of value by trick,

deceit, chicane or overreaching,” and requires “a material

misrepresentation” made by the defendant. Id.16 A

misrepresentation is material if it is “likely to be deemed

significant to a reasonable person considering whether to enter

into the transaction” — that is, if it misstates the “economic

value” of the bargain. Moore v. PaineWebber, Inc., 189 F.3d

165, 170 (2d Cir. 1999).

Pursuant to Federal Rule of Civil Procedure 9(b), a

plaintiff must plead each element of fraud “with particularity”

— that is, “detail the specific statements that are false or

16 “[T]he mail or wire communications themselves need not contain a

false statement,” but such a statement must be “part of the defendants’

scheme to [de]fraud.” Id. at 125. In effect, there must be “an underlying

‘scheme to defraud’ animated by a material misrepresentation,” and

identifying that misrepresentation is a core element of the claim. Id.

fraudulent, identify the speaker, state when and where the

statements were made, and explain why the statements were

fraudulent.” Williams, 889 F.3d at 124.17 In Moore, the Second

Circuit held that the plaintiff met the particularity

requirement with “a chart listing twelve different mailings said

to contain fraudulent representations, along with the dates of

these mailings and cross-references to the paragraphs in the

complaint in which the mailings [were] further discussed.” 189

F.3d at 173. Where, on the other hand, a complaint failed to

include “statements setting forth the content, date, or place of

any alleged misrepresentations, and the identity of the persons

making them,” a court in this district held that it failed to

meet Rule 9(b)’s particularity requirement. Colony at Holbrook,

Inc. v. Strata G.C., Inc., 928 F. Supp. 1224, 1232 (E.D.N.Y.

1996); see also Flexborrow LLC v. TD Auto Finance LLC, 255 F.

Supp. 3d 406, 422 (E.D.N.Y. 2017).

Certain of the plaintiffs’ allegations satisfy this

rigorous standard, and thus the plaintiffs can proceed (at this

stage) on their assertion that Clare committed a predicate act

of mail and wire fraud. However, as discussed below in the

17 This requirement applies to theories of both direct liability and

aiding and abetting. See Morrow v. Black, 742 F. Supp. 1199, 1204 (E.D.N.Y.

1990) (holding that “the complaint will need to meet the standards of Rule

9(b) with regard to the circumstances of the predicate acts of fraud whether

or not they were committed with the aid and abetment of other defendants who

did not personally commit the act”).

standalone RICO standing section, infra Section III.A.4, each

plaintiff has not adequately pled (as they must) a clear and

definite injury to business or property, proximately caused by

this fraud.

I. Actionable Allegations of Fraud

The complaint alleges a straightforward consumer fraud

in the sale of NXIVM’s educational program. Plaintiffs — all

seventy of them — allege that “NXIVM materials continuously made

several false and materially misleading assertions of fact.”

Compl. ¶ 211. These alleged misrepresentations related

primarily to the manner in which participants could obtain

promotion through the NXIVM curriculum and ultimately complete

it. NXIVM represented, among other things, that “promotion in

the NXIVM community depended on completing NXIVM courses.” Id.

This was false, plaintiffs allege: “In fact recruiting (which

generated revenue) rather than completing the [stated

curriculum] actually drove an enrollee’s advancement in the

NXIVM system.” Id. ¶ 42. The plaintiffs attribute

responsibility for those misrepresentations to Clare because she

was a “leader[] and chief financier[] of NXIVM,” which conveyed

“influence and control over the content of NXIVM’s doctrines,

curricula, sales materials, and practices.” Id. ¶ 38.

As to completion, “NXIVM materials” stated that

“NXIVM’s curriculum could be completed by the taking of

courses.” Id. ¶ 211. In truth, NXIVM is alleged to have run a

Hotel California of personal improvement: a “never-ending

program” that “trapped” participants in a “circle of

indebtedness and [uncompensated] labor.” Id. ¶ 57. In the end,

because new courses were “continuously added,” “no enrollee ever

did, or could, complete the NXIVM program.” Id. ¶ 40.

The complaint does not tell us precisely when or where

each of these claims appeared. Still, the complaint’s

allegations are specific enough — and plausible enough — to

allege a scheme to defraud at this stage. In the end, the

plaintiffs plausibly allege that the NXIVM curriculum was a

“pyramid scheme,” id. ¶ 4 — a well-established type of fraud in

which upfront payments are demanded of enrollees, goal posts are

regularly moved, and (among other things) promised rewards turn

out to be conditioned on recruiting other participants into the

program. See, e.g., United States v. Gold Unlimited, Inc., 177

F.3d 472, 478-79, 481 (6th Cir. 1999) (describing the mechanics

of pyramid schemes). And the plaintiffs need not allege that

Clare “actually mailed [or wired] . . . anything” herself.”

Pereira v. United States, 347 U.S. 1, 8 (1954). Allegations

that she “controlled” the enterprise and “caused false

statements to be made in the name of” NXIVM is sufficient. 4K&D

Corp. v. Concierge Auctions, LLC, 2 F. Supp. 3d 525, 538-39

(S.D.N.Y. 2014). Accordingly, the plaintiffs may proceed to

assert mail and wire fraud as a predicate act in service of

their RICO claim against Clare.

II. Other Allegations of Fraud

Notwithstanding the discussion above, the Court notes

that several of the plaintiffs’ allegations in support of their

fraud claims would not be actionable on a standalone basis.

This is true for a variety of reasons, as discussed below. The

Court takes this step in the interest of explaining the RICO

standing analysis below, as well as providing guidance for the

discovery process.

First, the complaint challenges Clare’s statement

(on her blog) that the Rational Inquiry method was “patent-

pending.” Compl. ¶ 51. Given that Raniere had by that time

successfully obtained several patents,18 plaintiffs have not

adequately alleged that this statement is materially false, let

alone that Clare knew as much. See Flexborrow LLC v. TD Auto

Finance LLC, 255 F. Supp. 3d 406, 420 (E.D.N.Y. 2017) (RICO

plaintiff bears the burden of “explain[ing] why the statements

were fraudulent”). The plaintiffs also see fraud in NXIVM’s

18 See, e.g., U.S. Patent No. 9646311-B2 (issued May 9, 2017)

(“Electronic course evaluation”); U.S. Patent No. 9421447-B2 (issued Aug. 23,

2016) (“Method and apparatus for improving performance”); U.S. Patent No.

9100904-B2 (issued Aug. 4, 2015) (“Data stream division to increase data

transmission rates”). This court “may properly take judicial notice of

official records of the United States Patent and Trademark Office.”

Telebrands Corp. v. Del Labs, Inc., 719 F. Supp. 2d 283, 287 n.3 (S.D.N.Y.

2010).

claim that Raniere was “an ascetic who had eschewed possessions

and wealth.” Id. at ¶ 45. This assertion is conclusory, in

that the complaint provides no contrary factual allegations

concerning Raniere’s actual possessions and wealth. But beyond

that, the plaintiffs do not connect this allegation to the

benefit of the bargain between NXIVM and the plaintiffs who

enrolled in its curriculum. See United States v. Regent Office

Supply Co., 421 F.2d 1174, 1180 (2d Cir. 1970) (holding that

fraudulent intent — a “critical element in a scheme to defraud”

— requires “an attempt to deceive the[] prospective customers

with respect to the bargain [the defendants] were offering”).

Similarly, statements that Raniere was “a celibate,”

Compl. ¶ 45, have not been connected the economic value of the

NXIVM curriculum. Moore, 189 F.3d at 170. Such statements thus

would not plausibly be “deemed significant” to a reasonable

person considering whether to purchase NXIVM course materials.

Id. at 170; see also United States v. Shellef, 507 F.3d 82, 108

(2d Cir. 2007) (mail and wire fraud statutes reach “schemes that

depend for their completion on a misrepresentation of an

essential element of the bargain”). And finally, statements

that Raniere was the “‘world’s smartest man’ with an IQ of 240,”

id. at ¶ 45, are a classic example of “blustering” — a statement

“upon which no reasonable buyer would be justified in relying.”

United States v. Weaver, No. 13-CR-120, 2016 WL 3906494, at *15

n.11 (E.D.N.Y. June 10, 2016); cf. United States v. Litvak, 808

F.3d 160, 175 (2d Cir. 2015) (“Where the misstatements are so

obviously unimportant to a reasonable investor that reasonable

minds could not differ on the question of their importance, we

may find the misstatements immaterial as a matter of law.”).

Whether these statements would be actionable on a

standalone basis, however, is a different question from whether

they have evidentiary relevance to the broader scheme alleged.

That question is for another day.

v. State Law Extortion

In the final predicate act asserted against Clare, the

plaintiffs allege that Raniere and Allison Mack committed “state

law extortion” against the twelve DOS plaintiffs to obtain

uncompensated labor, and that Clare “aided and abetted or

conspired” to commit that extortion. Compl. ¶ 213.19

The plaintiffs allege that Mack and Nikki Clyne (who

is no longer a defendant in this case) recruited female NXIVM

recruits to what they described as a “woman-centered” subgroup

of NXIVM. Id. ¶ 111. To join DOS, the recruits had to provide

“collateral” — some type of private material they would not want

19 “[R]acketeering activity” is defined by statute to include “any act

or threat involving” (among other things) “extortion . . . which is

chargeable under State law and punishable by imprisonment for more than one

year.” 18 U.S.C. § 1961(1). As a result, “[s]tate law crimes such as

extortion can constitute racketeering acts under RICO.” United States v.

Ivezaj, 568 F.3d 88, 91 n.2 (2d Cir. 2009).

released publicly. Id. ¶ 112. Mack and Clyne would then

threaten to release that initial material if the recruits did

not provide more collateral. Id. ¶ 115. “Once recruits were

trapped by their collateral, their masters forced the recruits

to perform labor for the masters and (secretly) Raniere,

including but not limited to transcribing video and audio

recordings.” Id.20

The complaint does not allege that Clare was a DOS

“master” or that she participated directly in this scheme.

Instead, it alleges that she “aided and abetted or conspired” to

extort the plaintiffs, “as evidenced by all the facts and

circumstances, including her longtime leadership roles in NXIVM

and closeness with Defendant Raniere.” Id. ¶ 213. Beyond guilt

by association, the plaintiffs argue that Clare is liable for

her efforts to cover up the extortion after the fact: she sent

“threatening letters she drafted to attorneys she had hired to

send to people trying to escape DOS after it came to light in

order to intimidate them from disclosing what Raniere and other

DOS masters had done to them.” Id.

20 Plaintiffs also allege that the various participants leveraged DOS

members’ collateral to extort sexual favors for Raniere. Compl. ¶ 109. But

the RICO statute provides a private right of action only for a “person

injured in his business or property” by the racketeering violation, 18 U.S.C.

§ 1964(c); personal injuries are not covered. Bascunan v. Elsaca, 874 F.3d

806, 817 (2d Cir. 2017).

Assuming that aiding and abetting a state-law

predicate act can itself constitute a predicate act,21 the DOS

plaintiffs have still failed to adequately allege Clare’s

involvement in the alleged extortion. Under New York law, a

person is liable as an aider and abettor “when, acting with the

mental culpability required for the commission” of the criminal

conduct, she “intentionally aids [a principal] to engage in such

conduct.” N.Y. Penal Law § 20.00. “An aider and abettor must

share the intent or purpose of the principal actor, and there

can be no partnership in an act where there is no community of

purpose.” People v. La Belle, 18 N.Y.2d 405, 412 (1966).

This definition has been held to exclude a defendant

whose only contribution to a crime comes in the effort to

conceal it after the fact. Evidence that a defendant “helped

his brother to remove traces” of a murder, for example, was

insufficient to support the defendant’s conviction for aiding

and abetting the brother’s crime. Id. at 413. The evidence did

not “exclude the hypothesis that he was unaware before the

murder of his brother’s intention to kill the girl.” Id. Of

course, such a defendant may be prosecuted for “acting as an

accessory after the fact, now known as hindering prosecution.”

21 The Second Circuit said in First Capital Asset Management, Inc. v.

Satinwood, 385 F.3d 159, 178 (2d Cir. 2004), that “one who assists in the

fraud also conducts or participates in the affairs of the enterprise.” This

statement is, of course, somewhat orthogonal to the question posed above.

Regardless, the Court need not resolve this question.

People v. Bacote, 107 A.D.3d 641, 641 (1st Dep’t 2013). But

hindering a prosecution is a separate state offense, see N.Y.

Penal Law § 205.65, and is not a RICO predicate. See 18 U.S.C.

§ 1961(1).

The DOS plaintiffs may (or may not) have alleged facts

sufficient to establish that Clare hindered the investigation or

prosecution of extortionate conduct. But they have not

adequately alleged that she aided and abetted Raniere, Mack or

others in the commission of that offense. The complaint’s only

nonconclusory allegation regarding Clare’s involvement is that

she drafted threatening letters (sent by her attorneys) to the

plaintiffs “after [the extortion] came to light.” Compl. ¶ 213.

As in La Belle, this indicates nothing as to whether she was

aware of the extortion prior to or during its occurrence, or

that she shared a “community of purpose” with the principals.

In the absence of any factual allegations indicating that Clare

knew of, agreed to, or intentionally aided in the extortionate

conduct, the DOS plaintiffs have failed to adequately allege

this predicate act.

As to the allegation that Clare entered into a

conspiracy to commit extortion in violation of Section 105 of

the New York Penal law, that fails because the plaintiffs fail

to allege any “overt act” Clare committed “in furtherance of the

conspiracy.” N.Y. Pen. Law § 105.20. As with the aiding and

abetting theory, the letter Clare is alleged to have drafted

comes too late to serve as the overt act. As with aiders and

abettors, New York law provides “that the acts and statements”

of a conspirator made “subsequent to” the “achievement of the

common purpose” of the conspiracy “are not performed or made in

the furtherance of said conspiracy,” because the conspiracy has

already ended. People v. Wisan, 505 N.Y.S.2d 361, 363 (N.Y.

Sup. Ct. July 14, 1986) (citing cases); but cf. People v.

Ribowsky, 77 N.Y.2d 284, 293 (1991) (“Acts of concealment

occurring . . . in some cases, after the conspiratorial

objective is achieved may constitute overt acts in furtherance

of an ongoing conspiracy.”) (emphasis added). Thus, acts

“performed by the co-conspirators” after the extortion was

already accomplished “are not overt acts performed in

furtherance of the conspiracy” within the meaning of Section

105.20 of the Penal Law. Id. (emphasis added). The only

non-conclusory act Clare is alleged to have performed is that

she drafted threatening letters to the plaintiffs after they

left NXIVM “to intimidate them from disclosing what Raniere and

other DOS masters had done to them.” Compl. ¶ 213 (emphasis

added). Those acts occurred subsequent to the completion of the

extortion, and are thus insufficient under New York law to

support the plaintiffs’ allegations.

b. Sara Bronfman’s Alleged Predicate Acts

The plaintiffs allege that Sara committed four types

of predicate acts: (1) immigration fraud; (2) witness tampering;

(3) forced labor, sex trafficking, and human trafficking; and

(4) mail and wire fraud. The complaint adequately alleges two

of these: witness tampering (as to Adrian) and mail and wire

fraud. Thus the RICO claims against her will proceed.

i. Immigration Fraud

Plaintiffs allege that “Sara Bronfman aided and

abetted and conspired to commit the immigration fraud

violations” committed by her sister Clare. As noted above, five

plaintiffs are alleged to have suffered injury from this

conduct: Adrian, Lindsay MacInnis, Maja Miljkovic, Camila, and

Daniela. Compl. ¶ 232. Sara is alleged to have furthered the

immigration violations “by establishing, operating, and

financing” an entity known as RCG. Id. ¶ 215.

RCG “purported” to function as a “school and daycare

for children” that would “improve child development and teach

the children several languages.” Id. ¶ 59. In reality,

plaintiffs claim, it “was a front for a trafficking

organization.” Id. The “specialists” who staffed its

(unlicensed) daycare centers were actually brought to the United

States to provide “uncompensated or under-compensated labor, and

to sexually gratify Raniere.” Id. ¶ 58.

Plaintiffs allege that Sara instructed Loretta Garza —

a Mexican national who, as the “titular head” of RCG, answered

directly to Sara and Raniere — “to maintain multiple sets of

accounting books to hide the existence of foreign nationals and

mask RCG’s finances.” Id. ¶¶ 60, 61. But of MacInnis, Camila,

Adrian, Daniela, and Miljkovic, the complaint alleges only that

Camila worked for RCG. See id. ¶ 278 (Camila’s uncompensated

labor consisted of “babysitting and teaching in RCG”).

And in respect of Camila, as discussed above, the

complaint does not adequately allege that Clare violated Section

1324. Thus, the plaintiffs’ allegation that “Sara Bronfman

specifically intended to facilitate Clare’s immigration fraud”

fails; the plaintiffs cannot establish aiding and abetting of an

underlying offense that is itself not plausibly alleged. See

Pipola, 83 F.3d at 562 (an aiding-and-abetting charge requires

proof that “the underlying crime was committed by someone other

than the defendant and that the defendant himself either acted

or failed to act with the specific intent of advancing the

commission of the underlying crime”).

ii. Witness Tampering

The complaint does plausibly allege that Sara

committed witness tampering in violation of 18 U.S.C. § 1512(b)

with respect to Adrian. She “offered Adrian a substantial sum

of money” to travel to and remain in France “during Raniere’s

trial,” with the purpose of “render[ing] him unavailable” to

testify in that proceeding. Compl. ¶ 180. The complaint

plausibly suggests that Sara sought to persuade Adrian to leave

the country with the intent, and the corrupt purpose, of

preventing him from testifying in an official proceeding. See

United States v. Gotti, 459 F.3d 296, 343 (2d Cir. 2006)

(affirming Section 1512(b) conviction over defendant’s argument

that he had “merely suggest[ed]” that a key witness invoke the

Fifth Amendment).

iii. Forced Labor, Sex Trafficking, and Human

Trafficking

The plaintiffs have not adequately alleged that Sara

has committed any forced labor, sex trafficking, or human

trafficking offense. This is for the same reason discussed

above with respect to Clare — that they insufficiently allege

Sara’s actual knowledge of Raniere’s conduct. See infra Section

III.C.2. Therefore, those alleged offenses cannot serve as a

predicate act for purposes of this RICO claim.

iv. Mail and Wire Fraud

The complaint attributes the same mail and wire fraud

to Sara as it does to Clare, on an identical theory: “[B]oth

Clare and Sara Bronfman, as leaders and chief financiers of

NXIVM, had knowledge of and influence and control over the

content of NXIVM’s doctrines, curricula, sales materials and

practices.” Compl. ¶ 38. As discussed above, see Section

III.A.3.a.iv, this allegation suffices (at this stage) to

establish Sara’s responsibility for the fraud scheme, and the

complaint adequately alleges that predicate.

4. RICO Standing

Lastly, Section 1964 requires each plaintiff asserting

a civil RICO claim to have suffered an “injur[y] in his business

or property by reason of a violation of section 1962.” 18

U.S.C. § 1964. This requirement is known as “RICO standing,”

and each plaintiff must establish it as to each defendant.

Denney v. Deutsche Bank AG, 443 F.3d 253, 266 (2d Cir. 2006).

RICO standing is not jurisdictional, but it is “a more rigorous

matter than standing under Article III.” Id. “A RICO plaintiff

only has standing if, and can only recover to the extent that,

he has been injured in his business or property by the conduct

constituting the RICO violation, and only when his or her actual

loss becomes clear and definite.” Id.; see also Brookhaven Town

Conserv. Comm. v. Walsh, 258 F. Supp. 3d 277, 284 (E.D.N.Y.

2017) (addressing RICO standing at the motion to dismiss stage

as a pleading requirement).

RICO standing requires each plaintiff to demonstrate

that the defendant’s predicate act “not only was a ‘but for’

cause of his injury, but was the proximate cause as well.”

Holmes v. Secs. Investor Protection Corp., 503 U.S. 258, 268

(1992). To satisfy the proximate cause requirement, each

plaintiff must allege “a direct relationship between the

plaintiff’s injury and the defendant’s injurious conduct.”

DeFalco v. Bernas, 244 F.3d 286, 329 (2d Cir. 2001). This

“directness” requirement is designed to mitigate “the difficulty

that can arise when a court attempts to ascertain the damages

caused by some remote action.” Anza v. Ideal Steel Supply

Corp., 547 U.S. 451, 458 (2006). “[T]he less direct the injury

is, the more difficult it becomes to ascertain the amount of a

plaintiff’s damages attributable to the violation, as distinct

from other, independent factors.” Holmes, 503 U.S. at 269.

The seventy plaintiffs who assert civil RICO claims

against both Clare and Sara Bronfman attempt to meet this

standard, both in the body of the complaint, see Compl. ¶ 231,

and in “Schedule A” thereto, added at the Court’s request, which

purports to set forth the ”Injury Type” suffered by each

plaintiff. Schedule A at 1, ECF No. 215-1. As to both Clare

and Sara, those attempts are insufficient at this stage for the

reasons explained below. The plaintiffs are directed to file a

revised Schedule A remedying those insufficiencies within 60

days of the date this order issues (if they can do so in good

faith).

i. Clare Bronfman

As discussed above, the plaintiffs adequately allege

that Clare committed two RICO predicate acts: mail and wire

fraud,22 and immigration fraud (in relation to Adrian), supra

Section III.A.3.a.i. But Adrian — the only plaintiff who could

plausibly have been injured by the immigration offense — has

failed to allege an injury proximately caused by that act. And

none of the plaintiffs have adequately alleged an injury

proximately caused by the NXIVM curriculum scheme to defraud.

In Anza, the Supreme Court held that the plaintiff

corporation had inadequately alleged injuries proximately caused

by a Section 1962 violation. 547 U.S. at 451. The plaintiff

and defendant were competitors, and the plaintiff’s theory was

that the defendants harmed it by “defrauding the New York tax

authority and using the proceeds from the fraud to offer lower

prices designed to attract more customers.” Id. at 457-58.

22 This is one predicate act, rather than two, for purposes of the RICO

statute because “it is not proper under RICO to charge two predicate acts

where one action violates two statutes.” Polycast Tech. Corp. v. Uniroyal,

Inc., 728 F. Supp. 926, 945 (S.D.N.Y. 1989); see United States v. Indelicato,

865 F.2d 1370, 1383 (2d Cir. 1989) (en banc) (warning that the court would

“disapprove any attempt by the government or a private plaintiff to go beyond

Congress’ intent and fragment an act that is plainly unitary into multiple

acts in order to invoke RICO”); see also United States v. Biaggi, 909 F.2d

662, 685-86 (2d Cir. 1990) (bribery and accepting a gratuity, though two

separate criminal offenses, constituted one predicate act because they were

both based on the same conduct: a promise of future employment), cert.

denied, 499 U.S. 904 (1991); United States v. Kragness, 830 F.2d 842 (8th

Cir. 1987); United States v. Walgren, 885 F.2d 1417 (9th Cir. 1989). The

plaintiffs rely on the same act — distributing curricula and promotional

materials — for the scheme to defraud as to both mail and wire fraud, which

thus constitute a single predicate act.

This theory had two problems. First, the “direct victim of this

conduct was the State of New York, not Ideal.” Id. “The cause

of Ideal’s asserted harms [] is a set of actions (offering lower

prices) entirely distinct from the alleged RICO violation

(defrauding the State).” Id. And second, “Ideal’s lost sales

could have resulted from factors other than petitioners’ alleged

acts of fraud,” because “[b]usinesses lose and gain customers

for many reasons, and it would require a complex assessment to

establish what portion of Ideal’s lost sales were the product of

National’s decreased prices.” Id. at 459.

Adrian has not plausibly alleged that Clare’s alleged

immigration violations proximately caused an injury to his

business or property. The predicate violation he describes

consists of Clare’s having “encouraged” or “induced” him to stay

in the United States (and to “go into hiding”) after his visa

expired, in violation of 8 U.S.C. § 1324(a). Compl. ¶ 70. But

the “harmful” conduct he describes is different: he alleges that

he was injured because he “invest[ed] his own money” (as well as

his labor) in the t-shirt business Clare and Raniere promised to

build with him, and he was never reimbursed. Compl. ¶ 68;

Schedule A at 1. That financial injury does not map neatly onto

Clare’s immigration fraud. The holdings of Holmes and Anza

dictate that Adrian’s injuries do not establish RICO standing

under Section 1964.23

Thus, Adrian — and the remaining sixty-nine plaintiffs

— are left to rely on allegations that they were proximately

harmed by the NXIVM curriculum fraud scheme. As the Second

Circuit has noted, RICO standing effectively injects a reliance

element into mail and wire fraud predicates. “That is because

reliance will typically be a necessary step in the causal chain

linking the defendant’s alleged misrepresentation to the

plaintiffs’ injury: if the person who was allegedly deceived by

the misrepresentation (plaintiff or not) would have acted in the

same way regardless of the misrepresentation, then the

misrepresentation cannot be a but-for, much less proximate,

cause of the plaintiffs’ injury.” Sergeants Benevolent Ass'n

Health & Welfare Fund v. Sanofi-Aventis U.S. LLP, 806 F.3d 71,

87 (2d Cir. 2015).

23 This is not fatal to Adrian’s RICO claim against Clare, as he may

still be able to allege standing as a victim of the mail and wire fraud

scheme. See Gregory P. Joseph, Civil RICO: A Definitive Guide, 75 (5th ed.

2018) (“[T]he [RICO] plaintiff need not suffer injury from each predicate act

comprising the pattern.”). And the “pattern” may include one or more RICO

predicates as to which no plaintiff has RICO standing. See H.J. Inc. v.

Northwestern Bell Telephone Co., 492 U.S. 229, 242 (1989); Moses v. Martin,

360 F. Supp. 2d 533, 549 (S.D.N.Y. 2004) (a “plaintiff may allege predicate

acts involving others to establish a pattern of racketeering activity”);

Empire Merchants, LLC v. Reliable Churchill, LLLP, No. 16-CV-5226, 2017 WL

5559030, *6 (E.D.N.Y. March 16, 2017) (“The weight of authority suggests that

a plaintiff need only show that one of defendants’ predicate acts proximately

caused its injury.”).

The plaintiffs have not met that burden, nor have they

alleged “clear and definite” injuries proximately caused by the

curriculum-related fraud scheme. In Schedule A, many of the

plaintiffs rely upon the same conclusory statement of harm:

“Financial harm including, by paying tuition and membership fees

for NXIVM courses, programs and groups.” Schedule A at 3.24

This does not tell us that any plaintiff was

victimized by the fraud scheme that is actually alleged: that

they took extra courses, for example, beyond what they were led

to believe would be required to complete the program in reliance

upon the fraudulent statements. Each plaintiff bears the burden

of alleging not only that they paid tuition and membership fees,

but also that they did so because of the fraud (or would not

have, apart from the fraud). See Motorola Credit Corp. v. Uzan,

322 F.3d 130, 135 (2d Cir. 2003) (“[A RICO] plaintiff must

demonstrate . . . causation of the injury by the violation.”).

Thus, each of the plaintiffs continuing to assert mail

and wire fraud allegations against Clare must supplement his or

her “Injury Type” information on Schedule A to describe fraud-

induced injuries with the “clear and definite” allegations that

RICO standing demands. These plaintiffs should take note first

24 This is true, for example, of Deanne Brunelle, id. at 2, Madeline

Carrier, id. at 3, Tabitha Chapman, id., Owen Giroux, id. at 6, Polly Green,

id. at 6, Rees Alan Haynes, id. at 7, Susan Pratt, id. at 14, Susan Patricia

Vieta, id. at 16, and Susan Wysocki, id. at 17.

of the allegations that this order holds (above) are non-

actionable under the mail and wire fraud statutes. The revised

Schedule A shall be filed within 60 days of the date this order

issues.

ii. Sara Bronfman

As to Sara, too, the plaintiffs adequately allege two

RICO predicate acts: mail and wire fraud, see Section

III.A.3.b.iv, and witness tampering (in relation to Adrian),

Section III.A.3.b.ii. Adrian does not allege (at all, let alone

plausibly) that he was injured in his business or property by

the witness tampering — indeed, his allegations suggest a

financial benefit: that Sara induced him to go to France “in

exchange for substantial sums of money.” Compl. ¶ 214. As to

the curriculum fraud predicate (which is effectively identical

as to both Sara and Clare), the plaintiffs’ allegations of

injury suffer from the same deficiencies described above.

B. RICO Conspiracy (Count II)

“[T]o state a RICO conspiracy, a plaintiff must allege

the existence of an agreement to violate RICO’s substantive

provisions.” Williams v. Affinion Grp., LLC, 889 F.3d 116, 124

(2d Cir. 2018). However, “[t]he RICO conspiracy statute []

broadened conspiracy coverage by omitting the requirement of an

overt act.” Salinas v. United States, 522 U.S. 52, 64 (1997).

Rather, “the core of a RICO civil conspiracy is an agreement to

commit predicate acts,” Hecht v. Commerce Clearing House, Inc.,

897 F.2d 21, 25 (2d Cir. 1990), which is to say that each

defendant “knew about and agreed to facilitate” the pattern of

racketeering activity.” Baisch v. Gallina, 346 F.3d 366, 377

(2d Cir. 2003).

Nonetheless, “injury from an overt act is necessary

and sufficient to establish civil standing for a RICO conspiracy

violation.” Hecht, 897 F.2d at 25. Accordingly, although the

plaintiffs need not plead that each defendant committed an overt

act in furtherance of the Section 1962 conspiracy, to recover

under Section 1964(c) they still must each allege injury.

So, when the existence of a RICO enterprise has been

established, the only question (prior to the standing analysis)

is whether “the defendant knew of, and agreed to, the general

criminal objective of a jointly undertaken scheme,” i.e. the

enterprise purpose. United States v. Arlington, 941 F.3d 24,

36-37 (2d Cir. 2019). Here, the RICO enterprise is alleged to

have had effectively three intertwined purposes: to accumulate

money and unpaid labor through NXIVM’s fraudulent curriculum

scheme, to “cultivate a pool of foreign laborers to support”

NXIVM, and to “groom women for sexual conduct with and for

Raniere.” Compl. ¶ 199.

Perhaps because Raniere was in fact convicted of RICO

and RICO conspiracy, the moving defendants focus their attention

on the question of whether the plaintiffs have adequately

alleged that each defendant agreed to join in a RICO conspiracy.

1. Clare Bronfman

The plaintiffs adequately allege that Clare agreed to

join the charged conspiracy. The complaint alleges that she

manifested the requisite agreement by her actions — including,

among other things, “accumulating a suite of positions in the

Enterprise that allowed her de facto power to operate and

control various important aspects of the Enterprise,”

“encouraging a sham marriage to facilitate the violation of

immigration law,” and “pressuring witnesses and victims to

retain counsel that she would pay for” so that she and NXIVM

could control them ”to intimidate and silence victims of

Raniere’s brutal campaign of sexual abuse and exploitation.”

Compl. ¶ 240. As discussed above, the complaint also adequately

alleges that Clare committed predicate acts of immigration fraud

and mail and wire fraud.

Considering the full set of allegations against her,

the plaintiffs raise a plausible inference that Clare agreed to

join a racketeering scheme with the intent that its overall

goals be effectuated, and that the scheme involved two or more

predicate acts. See New York Dist. Council of Carpenters

Pension Fund v. Forde, 939 F. Supp. 2d 268, 282 (S.D.N.Y. 2013)

(“[A] defendant’s agreement to join a conspiracy can be inferred

from circumstantial evidence of the defendant’s status in the

enterprise or knowledge of the wrongdoing.”). While the

complaint includes many conclusory allegations against Clare, it

nonetheless pleads specific facts sufficient to support an

inference of such agreement. See U.S. Fire Ins. Co. v. United

Limousine Serv., Inc., 303 F. Supp. 2d 432, 454 (S.D.N.Y. 2004)

(denying motion to dismiss RICO conspiracy claim where the

complaint’s “conclusory statements [were] buttressed by . . .

more specific allegations”); Bd. of Managers of Trump Tower at

City Ctr. Condo. by Neiditch v. Palazzolo, 346 F. Supp. 3d 432,

464 (S.D.N.Y. 2018) (same). Accordingly, this claim survives

(pending the submission of the revised Schedule A discussed

above to establish RICO standing).

2. Sara Bronfman

The complaint adequately alleges that Sara, too,

manifested her agreement to join the conspiracy. Like Clare,

Sara “accumulate[ed] positions in the Enterprise that were

accompanied by de facto power to operate and control” NXIVM.

Compl. ¶ 241. She “financed the Enterprise,” and “purchas[ed]

multiple properties used as NXIVM’s headquarters” and offices.

Id. And after the scheme was revealed publicly, she obstructed

prosecution of it by paying “Adrian to travel to France during

Raniere’s trial” rather than testifying. Id.

As with Clare, the “circumstantial evidence of

[Sara’s] status in the enterprise” is sufficient at this stage

to infer her “agreement to join [the] conspiracy.” New York

Dist. Council of Carpenters Pension Fund, 939 F. Supp. 2d at

282; see also United States v. Teitler, 802 F.2d 606, 614 (2d

Cir. 1986) (jury could “reasonably infer” defendant’s agreement

to participate in RICO conspiracy from, among other things, his

“status as a partner in the Teitler firm” and “testimony

concerning [his] role in the firm”).

Here, the complaint alleges that Sara obtained senior

positions across the NXIVM entities because she was “funneling

massive amounts of money into NXIVM.” Compl. ¶ 30. She was a

member of NXIVM’s Executive Board, Senior Executive of ESP, Co-

Founder of ESF, head of RCG, and Founder of NXIVM’s VIP

Programs. Id. Together with the allegations of her witness

tampering and her knowing participation in RCG’s endeavors,

these allegations are sufficient to overcome the motion to

dismiss the RICO conspiracy count against her (again, pending

the revised Schedule A).

3. Brandon Porter

The plaintiffs also contend that Brandon Porter

conspired to facilitate a racketeering scheme. His agreement to

join the scheme is evidenced, the complaint alleges, by his

having “conduct[ed] unauthorized human experiment[s]” —

“unscientific” treatments for Tourette’s Syndrome and obsessive-

compulsive disorder, Compl. ¶¶ 15, 84 — “to bolster NXIVM’s

scientific credibility and thereby increase its ability to amass

recruits.” Id. ¶ 246. The complaint also alleges that Porter

was “acting as a paid agent or employee of ESF in connection

with [that] experimentation.” Id. Unlike Clare and Sara

Bronfman, the complaint does not allege that Porter held a

prominent role in NXIVM, obtained elevated status within the

organization, or knew of the broader scheme at play. Porter’s

alleged role in the “human experiments,” without more, is

insufficient to show that he had knowledge of the curriculum

fraud scheme or the scheme to extort unpaid labor, or that he

participated in the overall scheme with the intent that its

goals be effectuated. To infer agreement to join a RICO

conspiracy, a defendant must at least “know the general nature

of the enterprise” and “that the enterprise extends beyond his

individual role.” United States v. Viola, 35 F.3d 37, 44 (2d

Cir. 1994). The plaintiffs’ factual allegations do not support

the plausible inference that Porter had such an awareness.

4. Danielle Roberts

Finally, the plaintiffs contend that Danielle Roberts

is liable for RICO conspiracy. In a single paragraph, the

complaint points to Roberts’ role in “branding DOS victims’

pubic regions without their informed consent” and her

“continuing [promotion of] DOS well-after the details of DOS-

related crimes came to light” as evidence of her agreement to

join the racketeering scheme. Compl. ¶ 245. The complaint also

alleges that Roberts admitted to a New York State medical review

board that she “purchased the electrocautery device, that she

knew that the brand was KAR to represent Raniere’s initials, and

that Raniere was the grandmaster to the [DOS] members who were

his slaves.” Id. ¶ 122.

Again, however, it is not sufficient to allege that

Roberts committed some act that furthered the conspiracy.

Plaintiffs must plausibly allege that she joined in the scheme

“with the intent that its overall goals be effectuated.” United

States v. Zemlyansky, 908 F.3d 1, 11 (2d Cir. 2018) (emphasis

added).

Here again, the plaintiffs do not allege that Roberts

knew of the curriculum fraud or any immigration-related

violations. And as discussed above, the civil RICO statute does

not reach personal injuries — only injuries to business or

property. Thus, Roberts’ discrete acts underlying a given

medical procedure — no matter how medically unjustified — do not

suffice. As with Porter, the plaintiffs have failed to allege

facts suggesting Roberts’ knowledge of the “general nature of

the enterprise” and “that the enterprise extend[ed] beyond [her]

individual role.” Viola, 35 F.3d at 44. The RICO conspiracy

claim against her is therefore dismissed.25

C. Human Trafficking Under the TVPRA (Count III)

Nineteen plaintiffs26 also bring claims pursuant to the

Trafficking Victims Protection Reauthorization Act of 2008

(“TVPRA”) — specifically, 18 U.S.C. § 1595, which provides a

private civil action for victims. Defendants Clare, Sara,

Porter, and Roberts move to dismiss these claims on the bases

that the complaint does not adequately allege their direct

violation of, participation in, knowledge of, or benefits

received from any Chapter 77 violation, as addressed further

below.

Plaintiffs can, as a general matter, assert a TVPRA

claim in two ways. They can allege a “direct” claim — that is,

that a given defendant was the “perpetrator” of a violation of

any provision in Chapter 77 of Title 18, which covers sex

trafficking, forced labor, and human trafficking. 18 U.S.C.

§ 1595(a). Or they can allege that a defendant satisfied the

25 Moreover, the plaintiffs allege no specific facts regarding Roberts’

continued “promot[ion]” of DOS, and cite no law for the proposition that one

can agree to join a conspiracy by promoting (or defending) that organization

after its members are charged.

26 All plaintiffs allege these Chapter 77 violations as RICO predicate

acts. The plaintiffs who bring them as standalone claims are the “exo / eso

Plaintiffs,” the “DOS plaintiffs,” Daniela, Camila, and Adrian. The thirteen

DOS Plaintiffs are Sarah Edmonson, Jessica Salazar, India Oxenberg, Soukiana

Mehdaoui, Rachel, Nicole, Valerie, Jane Doe 8, Paloma Pena, Jane Doe 9,

Kristin, Veronica Jaspeado, and Charlotte. The three exo / eso Plaintiffs

are Lindsay MacInnis, Adrienne Stiles, and Bonnie Piese. Compl. ¶¶ 257, 259.

three elements of a “beneficiary” claim — that (a) the defendant

knowingly benefitted, or attempted or conspired to benefit, (b)

from “participation in a venture,” that (c) the defendant “knew

or should have known has engaged in” a Chapter 77 violation.

Id. A defendant accused of a beneficiary violation does not

need to benefit financially — she can benefit either

“financially or by receiving anything of value.” Id. (emphasis

added). Here, the various plaintiffs bring claims for both

direct and beneficiary liability. On the beneficiary liability

claims, the plaintiffs rely substantially on Raniere’s

convictions for forced labor conspiracy, sex trafficking

conspiracy, sex trafficking, and attempted sex trafficking. See

Judgment as to Keith Raniere, No. 18-CR-204, ECF No. 969 at 2.

As set forth below, while the complaint adequately

pleads that NXIVM was a “venture” for purposes of the TVPRA, the

plaintiffs have not sufficiently alleged that any moving

defendant directly violated Chapter 77; they have, however,

sufficiently alleged beneficiary liability for Clare and Sara as

to certain claims.

1. The Alleged Venture

The TVPRA defines a “venture” as “any group of two or

more individuals associated in fact, whether or not a legal

entity.” 18 U.S.C. § 1591(e)(6). The complaint alleges that

“NXIVM was not only a RICO enterprise, but also a trafficking

‘Venture’ designed to groom and procure women for Defendant

Raniere’s sexual predation and to provide free labor and

services to members of the Venture.” Compl. ¶ 249. “All

Individual Defendants,” the plaintiffs assert, “participated in

the Venture,” which “was led by Defendant Raniere.” Id. For

the same reasons that the complaint adequately alleges that

NXIVM’s senior leadership was an association-in-fact enterprise,

see Section III.A.1 above, it also sufficiently pleads that the

group was a venture for purposes of the TVPRA.

2. Count 3(A): Sex Trafficking and Attempted Sex

Trafficking

First, the complaint alleges direct TVPRA claims

against Raniere, Clare, Roberts, Russell, and Mack. These

claims are based on allegations that each of these defendants

committed two Chapter 77 violations — both sex trafficking and

attempted sex trafficking, in violation of 18 U.S.C. §§ 1591 and

1594(a), respectively. Compl. ¶ 250. Only Clare and Roberts

have moved to dismiss these claims.

To plead a direct violation under Section 1591, the

complaint must allege that the defendant:

(1) “in or affecting interstate or foreign commerce”;

(2) recruited, enticed, harbored, transported,

provided, obtained, or maintained by any means a

person;

(3) “knowing, or in reckless disregard of the fact,

that means of force, threats of force, fraud, coercion

. . . or any combination of such means will be used”;

(4) “to cause the person to engage in a commercial sex

act.”

18 U.S.C. § 1591(a); see also Noble v. Weinstein, 335 F. Supp.

3d 504, 515 (S.D.N.Y. 2018). The modifier “commercial” is

defined broadly to encompass more than the payment of money.27

In the alternative, the complaint asserts beneficiary

claims under Section 1591. These claims require a given

plaintiff to establish that the defendant in question knowingly

benefitted from their participation in NXIVM’s senior

leadership, knowing the organization to have “engaged” in a

violation of Section 1591 (or when they “should have” known as

much). See S.J. v. Choice Hotels Int’l, Inc., 473 F. Supp. 3d

147, 152-53 (E.D.N.Y. 2020). Thus, a complaint adequately

pleaded a Section 1591 violation against a priest (Father

Carrier) who “ignored evidence” that Douglas Perlitz, the

founder of a school for poor children in Haiti, was sexually

abusing students. The complaint alleged

that Father Carrier . . . was a frequent visitor to

PPT where he stayed in Perlitz’s home, that he was in

27 As the Second Circuit explained in rejecting Raniere’s criminal

appeal, a “commercial sex act” is “any sex act, on account of which anything

of value is given to or received by person,” where “value” refers to “a

subjective, rather than objective, concept.” United States v. Raniere, 55

F.4th 354, 362 (2d Cir. 2022). As a result, “anything of value” has does not

require a “monetary or financial component,” and a “commercial sex act” is

not just one conducted for profit, but rather for anything of subjective

value. Id. It is a deliberately “expansive understanding of the phrase.”

Id. at 361.

Perlitz’s bedroom when Perlitz showed a pornographic

video to a PPT student, and that he shunned a Haitian

administrator at PPT after she tried to stop Perlitz’s

sexual abuse of PPT students.

Jean-Charles v. Perlitz, 937 F. Supp. 2d 276, 280 (D. Conn.

2013). Carrier also “knew at least one PPT student was living

at Perlitz’s home.” Id. at 288. These allegations rendered it

plausible that Carrier’s employer knew or “should have known”

that the school was violating Section 1591. Id.

On the other hand, allegations that hotel franchisors

“were generally aware that sex trafficking sometimes occurred on

their franchisees’ properties” were insufficient to state a

claim for beneficiary liability absent knowledge (or at least

constructive knowledge) of the particular trafficking scheme at

issue. Choice Hotels, 473 F. Supp. 3d at 154 (describing those

allegations as supporting only a “might have been able to guess”

scienter standard); see also Does 1-6 v. Reddit, Inc., 51 F.4th

1137, 1145 (9th Cir. 2022) (“Mere association with sex

traffickers is insufficient absent some knowing participation in

the form of assistance, support, or facilitation.”).

For the reasons that follow, the complaint states a

Section 1595 claim for beneficiary liability against Clare, but

fails to state such a claim against Danielle Roberts.

i. Clare Bronfman

The plaintiffs allege that Clare is liable for sex

trafficking offenses against the “exo / eso Plaintiffs,” the

“DOS Plaintiffs,” Daniela, and Camila.28

exo / eso Plaintiffs. First, the complaint alleges

that “Clare perpetrated sex trafficking offenses against the exo

/ eso Plaintiffs” — Lindsay MacInnis, Adrienne Stiles, and

Bonnie Piese — by “recruit[ing] them to join” that group.

Compl. ¶ 257. Clare did so, Plaintiffs allege,

knowing or in reckless disregard of the fact that she

would use fraud (false promises of a job, salary, and

career advancement) or threats of serious harm

(psychological and verbal abuse and, at times, threats

of deportation) to groom or procure these Plaintiffs

for Defendant Raniere and cause them to engage in

commercial sex acts with him.

Id.

This passage describes a direct claim rather than a

beneficiary claim. And on that claim, the complaint is

razor-thin. The conclusory statement quoted above merely

recites the elements of the offense (excluding the

interstate-commerce element); the complaint proffers no specific

facts to establish those elements. See Iqbal, 556 U.S. at 678

28 The thirteen DOS Plaintiffs are Sarah Edmonson, Jessica Salazar,

India Oxenberg, Soukiana Mehdaoui, Rachel, Nicole, Valerie, Jane Doe 8,

Paloma Pena, Jane Doe 9, Kristin, Veronica Jaspeado, and Charlotte. The

three exo / eso Plaintiffs are Lindsay MacInnis, Adrienne Stiles, and Bonnie

Piese.

(“[A] formulaic recitation of the elements of a cause of action

will not do.”).29 At no point does the complaint directly link

any specific false promise, or any specific threat of serious

harm, made by Clare herself to any commercial sex act involving

MacInnis, Stiles, or Piese. Accordingly, the direct claim

fails.

DOS Plaintiffs. Next, the DOS plaintiffs sufficiently

allege a beneficiary claim against Clare. They allege that “she

knowingly benefited by receiving things of value, including

enhanced status, power, and prestige within NXIVM, from

participation in the Venture, which she knew or should have

known was sex trafficking the DOS Plaintiffs.” Compl. ¶ 259.

This trafficking occurred when the DOS plaintiffs were recruited

(by Raniere, Mack, and Clyne) for the purpose of engaging in a

“commercial sex act.” Id. ¶ 253. As described above, Mack and

Clyne allegedly misrepresented the nature of DOS to induce these

plaintiffs to provide “damaging collateral,” and they and

Raniere would then “threaten explicitly or impliedly to release

that collateral” if the DOS plaintiffs did not “engage in

commercial sex acts with [Raniere] and others.” Id.

29 The complaint also alleges no facts to establish the interstate-

commerce element with respect to Stiles and Piese. Although the burden to

plead this element is “minimal,” United States v. Celaj, 649 F.3d 162, 168

(2d Cir. 2011), the complaint still must offer sufficient facts to meet that

burden. See Noble v. Weinstein, 335 F. Supp. 3d 504, 515 (S.D.N.Y. 2018)

(“To state a claim under 18 U.S.C. § 1591,” a plaintiff “must adequately

plead,” among other things, that the conduct implicated “interstate or

foreign commerce.”).

The plaintiffs adequately allege that Clare “should

have known” about this coercive recruiting. Constructive

knowledge is an intensely fact-based assessment, and obviously

presents a meaningfully lower hurdle than a requirement to show

actual knowledge. Given the absence of any factual record, the

claim may proceed at this stage. Plaintiffs allege, among other

things, that Raniere and the “DOS First Line Masters (including

Mack and Clyne)” were jointly responsible for the coercive

recruitment of DOS members, and Clare “was a member of the Inner

Circle (which included Mack and Clyne).” Id. ¶ 259. Further,

they contend that Clare’s knowledge can be inferred from her

“false campaigns against DOS defectors, who came to her for the

release of their collateral,” and her alleged disclosure to “a

reporter that there was a video of Plaintiff Edmonson’s [sic]

branding, further demonstrates that she knew or should have

known about the sex trafficking offenses within DOS when they

occurred.” Id. ¶ 259. At this stage, these allegations suffice

to state a claim for beneficiary liability against Clare

pursuant to Section 1595.

Veronica Jaspeado. Whereas the plaintiffs allege only

beneficiary claims against Clare in connection with the other

DOS Plaintiffs, they allege that Clare also attempted to traffic

Veronica Jaspeado directly. Per the complaint, Clare personally

“funneled Veronica Jaspeado . . . to DOS by encouraging her to

join exo / eso. Although Clare’s attempts were unsuccessful,

Veronica was later recruited into DOS by a First Line DOS

Master.” Compl. ¶ 162. The complaint asserts that

[b]ased on Bronfman’s leadership of exo / eso, her

interactions with Veronica, her proximity to Raniere,

her defense of DOS, and attacks on DOS victims after

DOS was made public . . . , it is reasonable to infer

that when Clare attempted to recruit Veronica into exo

/ eso she intended for Veronica to engage in sex acts

with Raniere and knew that she and members of the

Inner Circle would use extortive means to procure

uncompensated labor and commercial sex acts from her.

Id. ¶ 166. These unsupported allegations, which sound in guilt

by association, are inadequate to raise a plausible inference

that Clare attempted to sex traffic Jaspeado. See, e.g., United

States v. Zhong, 26 F.4th 536, 558 (2d Cir. 2022) (“Evidence

that demonstrates only guilt by association is irrelevant to the

question of a defendant’s actual guilt.”); De Sole v. Knoedler

Gallery, LLC, 139 F. Supp. 3d 618, 657 (S.D.N.Y. 2015)

(rejecting plaintiffs’ arguments as amounting “to nothing more

than guilt by association”). The complaint proffers no specific

facts describing how Clare supposedly “attempted to recruit

Veronica into exo / eso,” let alone any facts evincing that she

intended to (or knew that others would) “use extortive means” to

compel Veronica to engage in anything, much less commercial sex

acts. See Twombly, 550 U.S. at 555 (“Factual allegations must

be enough to raise a right to relief above the speculative

level.”). For these reasons, this claim must be dismissed.

Camila & Daniela. Finally, the plaintiffs allege that

Clare is liable as a beneficiary for the sex trafficking of both

Camila and Daniela. The complaint states that Clare “knowingly

benefited by receiving things of value, including enhanced

status, power, and prestige within NXIVM, from participation in

the Venture, which she knew or should have known sex trafficked

Camila and Daniela.” Compl. ¶ 260. In particular, the

plaintiffs allege, Raniere “recruited” and “harbored” Daniela

and Camilla by promising them “a job, salary, education, and

legal immigration status” should they “submit to Defendant

Raniere’s demands.” Id. ¶ 255-56. The plaintiffs say that

Clare knew or should have known that Raniere recruited and

harbored Daniela and Camila “to engage in commercial sex acts

with him.” Id. ¶ 260. This knowledge (or constructive

knowledge), the plaintiffs contend, is “evidenced by facts

including her leadership roles and power within NXIVM, her

familiarity with Raniere and NXIVM’s operations and Camila and

Daniela, and that she paid an attorney to direct Camila not to

cooperate with an FBI investigation into NXIVM.” Id.

These allegations, taken as a whole, are sufficient to

state a plausible claim for Section 1595 beneficiary liability

against Clare based upon constructive knowledge of Raniere’s

activities and her role in NXIVM’s operations.

ii. Danielle Roberts

The plaintiffs allege that Danielle Roberts, too, is

liable as a beneficiary for sex trafficking offenses against the

DOS Plaintiffs. The complaint asserts that Roberts “knowingly

benefitted by receiving things of value, including enhanced

status, power, and prestige within NXIVM from participation in

the Venture, which she knew or should have known was engaged in

sex trafficking offenses.” Compl. ¶ 265. But unlike Clare,

Roberts is alleged to have had a relatively narrow role at

NXIVM. The complaint alleges that Roberts had actual or

constructive knowledge of Raniere’s offenses based on the fact

that she “brand[ed] DOS members with [Raniere’s] initials — a

mark of their sexual servitude and Defendant Raniere’s

predation.” Id. “No DOS Slaves,” the plaintiffs claim, “gave

voluntary, informed consent before being branded,” and none

“could have consented under the circumstances because each slave

was branded under threat of the release of their collateral or

punishment.” Id. ¶ 124.

To be sure, these allegations could suggest that

Roberts participated in unlawful conduct — specifically, as

addressed below, the allegedly coercive branding of DOS members

is sufficient to sustain the plaintiffs’ battery claims against

Roberts. See infra Section III.E. But the complaint alleges no

facts to bridge the gap between Roberts’ knowledge of this

malfeasance and an awareness (or even constructive awareness)

that the threats to release any recruit’s “collateral” were

connected to a commercial sex act.

The conclusory allegation that the branding was “a

mark” of the recipients’ sexual servitude says nothing about

whether Roberts knew as much. And while the absence of informed

consent may speak to why Roberts forfeited her medical license,

see Compl. ¶ 120, it does not suggest her knowledge of sexual

assault. (The plaintiffs do not allege that Roberts knew that

the defendants’ receipt of collateral or their threats to

release it were related to a commercial sex act.)

In this regard, the allegations here are even more

limited than those held insufficient in other cases. In Eckhart

v. Fox News Network, LLC, for example, the plaintiff alleged

that Fox News knew or should have known that a former anchor at

the network subjected her to commercial sex acts including

sexual assault and rape. No. 20-CV-5593, 2021 WL 4124616, at

*11 (S.D.N.Y. Sept. 9, 2021). Fox should have known as much,

she claimed, because it was “well aware” of the anchor’s

“inappropriate sexual misconduct,” knew of his extramarital

affair, and knew that he had “completed a sex addiction

rehabilitation program at its request.” Id. The plaintiff also

alleged that it was an “open secret” that the anchor was “a

serial harasser.” Id. These allegations were insufficient to

establish that the network knew or should have known of the sex

trafficking at issue. Id. Here, too, the plaintiffs have not

adequately alleged defendant Roberts’ knowledge of the alleged

trafficking scheme.

3. Count 3(B): Conspiracy to Commit Sex Trafficking

Certain plaintiffs also bring Section 1595 claims

based on the predicate act of conspiracy to commit sex

trafficking in violation of 18 U.S.C. § 1594(c), which provides

for criminal liability for anyone “conspir[ing] with another to

violate Section 1591.” As noted above, Raniere was convicted of

sex trafficking conspiracy in violation of Section 1591.

Judgment of Keith Raniere, No. 18-CR-204, ECF No. 969 at 2.

These claims amount to allegations that the defendants here

joined Raniere’s conspiracy. The plaintiffs asserting these

claims are the “exo / eso Plaintiffs,” the “DOS Plaintiffs,”

Daniela, and Camila; they assert the claims against Raniere,

Clare, Mack, Roberts, and Russell. Clare and Roberts have moved

to dismiss the claims against them; Clare’s motion is denied,

but Roberts’s motion is granted.

To state a conspiracy claim, the plaintiffs must plead

that “two or more persons entered into a joint enterprise for an

unlawful purpose, with awareness of its general nature and

extent.” United States v. Torres, 604 F.3d 58, 65 (2d Cir.

2010). “The knowledge of the parties is relevant to a

conspiracy charge to the same extent as it may be for conviction

of the substantive offense.” Id. In the context of a TVPRA

claim based on conspiracy to commit sex trafficking, the

plaintiffs must allege “an actual agreement to participate in a

sex-trafficking venture.” Doe 1 v. Deutsche Bank A.G., 671 F.

Supp. 3d 387, 412 (S.D.N.Y. 2023). JP Morgan and Deutsche

Bank’s agreement to provide banking services for Jeffrey Epstein

and “affiliated entities,” for example, was insufficient to

support the further inference that they agreed “to participate

in a sex-trafficking venture.” Id. That was so despite the

plaintiff’s allegations that the banks “knew, or recklessly

disregarded” that their banking services “would assist” the sex-

trafficking venture because the plaintiffs had inadequately

alleged the banks’ agreement to participate in sex-trafficking.

Id.

i. Clare Bronfman

The plaintiffs do not adequately allege that Clare

agreed to participate in a sex trafficking conspiracy. The

complaint asserts that she “created exo / eso with Raniere to

obtain women for Defendant Raniere in furtherance of the

Venture,” which “evidence[s]” her “larger agreement” with the

other individual defendants “to procure and groom the DOS

Plaintiffs, the exo / eso Plaintiffs, Daniela, and Camila for

commercial sex acts with Defendant Raniere.” Compl. ¶ 267.

But this is a direct claim that Clare conspired to

violate Section 1591, not a Section 1595 beneficiary claim. As

such, the mens rea requirement is higher: the plaintiffs must

allege that Clare actually knew about (and agreed to facilitate)

Raniere’s sex trafficking scheme — not that she merely should

have known. Compare 18 U.S.C. § 1591 with 18 U.S.C. § 1595.

The complaint proffers no facts to support its bare declaration

that Clare created exo / eso “to obtain women for Raniere.” And

it provides no basis to infer that Clare actually knew Raniere

was coercing plaintiffs to participate in commercial sex acts

with him, let alone that she formed exo / eso for that purpose.

Faced with the higher mental-state requirement in Section 1591,

this claim fails.

ii. Danielle Roberts

The plaintiffs also fail to adequately allege that

Danielle Roberts agreed to participate in a sex trafficking

scheme in violation of Section 1591. The complaint asserts that

“Roberts branded DOS victims at the instruction of Defendant

Raniere in furtherance of the Venture,” and that this alone

shows that she joined the “larger agreement” to commit sex

trafficking. Compl. ¶ 267. As noted above, Roberts’s role in

branding DOS members does not indicate that she had knowledge of

a sex trafficking scheme that victimized those members, or that

she specifically agreed to facilitate such a scheme. As in Doe

1 v. Deutsche Bank A.G., Roberts’ relatively narrow conduct is

insufficient to show that she agreed with Raniere to “assist his

sex-trafficking venture.” 671 F. Supp. 3d at 412. This claim

against her therefore fails.

4. Count 3(C): Forced Labor and Human Trafficking, and

Attempted Forced Labor and Human Trafficking

The TVPRA targets trafficking for forced labor as well

as commercial sex acts. Nineteen plaintiffs30 bring TVPRA claims

against Raniere, Clare, Sara Bronfman, Mack, Porter, Roberts,

and Russell based on the predicate offenses of forced labor and

human trafficking, in violation of 18 U.S.C. §§ 1589 and 1590,

respectively, and attempted forced labor and human trafficking,

in violation of 18 U.S.C. § 1594(a). Clare, Sara, Porter, and

Roberts have moved to dismiss the claims against them.

Section 1589 reads as follows:

(a) Whoever knowingly provides or obtains the labor

or services of a person by any one of, or by any

combination of, the following means —

(1) by means of force, threats of force,

physical restraint, or threats of physical

restraint to that person or another person;

(2) by means of serious harm or threats of

serious harm to that person or another

person;

30 The DOS plaintiffs, exo / eso plaintiffs, Daniella, Camila, and

Adrian bring this claim against Raniere and Clare. Compl. at 95, 98. Camila

alone brings this claim against Sara and Porter. Id. at 97, 102. Plaintiffs

Nicole, Oxenberg, Mehdaoui, Salazar, Rachel, Valerie, and the DOS plaintiffs

bring this claim against Mack. Id. at 100. The DOS plaintiffs bring this

claim against Roberts. Id. at 101. And Camila and the DOS plaintiffs bring

this claim against Russell. Id. at 102.

(3) by means of the abuse or threatened abuse of

law or legal process; or

(4) by means of any scheme, plan, or pattern

intended to cause the person to believe

that, if that person did not perform such

labor or services, that person or another

person would suffer serious harm or physical

restraint,

shall be punished as provided under subsection (d).

18 U.S.C. § 1589.

A forced labor violation can, in turn, constitute an

element of a human trafficking violation under Section 1590. A

human trafficking claim arises when a defendant “knowingly

recruits, harbors, transports, provides, or obtains by any

means, any person for labor or services,” 18 U.S.C. § 1590(a),

“in violation of the statutes prohibiting, inter alia, forced

labor.” Adia v. Grandeur Mgmt., Inc., 933 F.3d 89, 94 (2d Cir.

2019). Thus, when a human trafficking claim is predicated on a

failed forced labor claim, the human trafficking claim will fail

as well.

As set forth below, the plaintiffs do not adequately

plead a forced labor violation against Porter or Roberts;

however, some of the beneficiary claims against Clare and Sara

are adequately pled.

i. Clare Bronfman

The plaintiffs assert TVPRA claims based on predicate

acts of forced labor and human trafficking against Clare on

behalf of the exo / eso Plaintiffs, the DOS Plaintiffs, Adrian,

Camila, and Daniela.

exo / eso Plaintiffs. The complaint first alleges

that Clare is liable for forced labor and human trafficking

violations against the exo / eso Plaintiffs. The plaintiffs

contend that she “provided and obtained” their “uncompensated

labor and services (the establishment of a company,

administrative and menial work, and personal assistant work) by

means of serious harm (sleep deprivation, psychological, and

verbal abuse) and in some cases by means of the abuse or

threatened abuse of law or legal process (the threat of

deportation).” Compl. ¶ 280. They also allege that “Raniere

and Clare told [MacInnis, Piese, and Stiles] that that they

would own and operate exo / eso and divide the profits generated

by the company between themselves,” but “ownership of exo / eso

was not transferred to them, and they never received a share of

the profits.” Id. ¶ 95.

The allegations concerning MacInnis do not make out a

forced-labor claim against Clare. The complaint alleges that

“MacInnis participated in exo / eso only because of her

compromised immigration status, orchestrated by Clare and

Raniere,” and that “[a]s part of her participation in exo / eso,

she performed uncompensated labor, namely participating in

meetings with Raniere, creating the training for exo / eso, and

teaching exo / eso classes, while Clare subjected her to

emotional and verbal abuse.” Id. ¶ 96.

These allegations fail to show that Clare obtained

MacInnis’s labor “by means of” (1) “force [or] threats of force,

(2) “serious harm or threats of serious harm”, (3) “abuse or

threatened abuse” of the legal process, or (4) “any scheme . . .

intended to cause [MacInnis] to believe that” someone would

suffer serious harm or physical restraint if she did not perform

such labor. 18 U.S.C. § 1589(a). The term “serious harm” in

Section 1589(a)(2) means:

any harm, whether physical or nonphysical, including

psychological, financial, or reputational harm, that

is sufficiently serious, under all the surrounding

circumstances, to compel a reasonable person of the

same background and in the same circumstances to

perform or to continue performing labor or services in

order to avoid incurring that harm.

18 U.S.C. § 1589(c)(2).

MacInnis makes her allegations under the umbrella of

the “serious harm” prong of Section 1589, pointing both to

“emotional and verbal abuse” and threats of deportation to

fulfill the statute’s requirements. Neither allegation

suffices.

First, the non-specific allegation that Clare

subjected MacInnis to “emotional and verbal abuse” is plainly

insufficient to plead a threat of serious harm; indeed, it does

not even suggest the making of a threat.

And second, while threats of deportation can

constitute serious harm, see Adia, 933 F.3d at 93-94, the

complaint does not allege sufficient facts to support MacInnis’

claim that Clare made such threats here. See Compl. ¶ 257.

Although the complaint states that Clare “intentionally

compromised” MacInnis’s immigration status by not paying her “a

salary sufficient to satisfy the requirements of her visa,” id.

¶ 76, it does not suggest that Clare threatened — explicitly or

implicitly — to report MacInnis to immigration authorities if

MacInnis failed to perform labor or services. Indeed, the only

alleged threat of legal action — to enforce a “purported

violation of a non-compete clause [MacInnis] had supposedly

signed with NXIVM” — occurred after MacInnis had already “fled

to Canada,” her home country. Id. ¶¶ 76-77. MacInnis’ forced

labor claim therefore fails; as a result, so does her human

trafficking claim.

Plaintiff Piese likewise fails to state a claim for

forced labor or a human trafficking against Clare. The

complaint alleges that “Piese was on call every hour of the day”

while working for exo / eso, that she was “punished by Clare

when she was unavailable,” and that she was “not paid for her

first nine months of work for Ultima.” Id. ¶ 97. The complaint

says nothing about the nature of the alleged “punishment,” and

therefore insufficiently alleges serious harm or the threat

thereof. As a result, Piese’s forced labor claim fails, and her

human trafficking claim necessarily falls with it.

Stiles’ forced labor claim fails for similar reasons.

The complaint alleges only that Stiles “reported directly to

Clare,” that her responsibilities “were so demanding that she

quit her full-time job,” and that she did not receive pay “for

her first year of work.” Id. ¶ 98. It does not allege that

Clare threatened any serious harm or legal action against Stiles

to procure her labor or services. For these reasons, Stiles’

forced labor claim fails; her human trafficking claim

necessarily fails with it.

DOS Plaintiffs. The plaintiffs assert that Clare is

liable as a beneficiary for forced labor and human trafficking

violations against the DOS Plaintiffs. These plaintiffs allege

that “DOS First Line Masters and Defendant Raniere were forcing

the DOS Plaintiffs to perform menial tasks, acts of care, and

commercial sex acts.” Id. ¶ 281. Elsewhere, the complaint

explains that “DOS slaves” were forced to “review and edit NXIVM

course materials and transcribe numerous video presentations

featuring Raniere and other members of the Inner Circle.” Id.

¶ 117. The plaintiffs contend that Clare “knowingly benefited”

from this labor “by receiving things of value, including

enhanced status, power, and prestige within NXIVM, from

participation in the Venture, which she knew or should have

known was engaged in labor trafficking offenses.” Id. ¶ 281.

The plaintiffs submit that Clare had actual or

constructive knowledge of their forced labor “because she was a

member of the Inner Circle who was in close and constant contact

with other members of the Inner Circle, including Defendants

Mack and Clyne and Raniere.” Id. Such knowledge is further

“evidenced by the fact that she launched legal campaigns against

DOS defectors who came to her for the return of their

collateral.” Id. At this stage, these allegations are

sufficient to support the plaintiffs’ claim for beneficiary

liability against Clare for her participation in Raniere’s

forced labor and human trafficking scheme, given the reduced

mental-state requirement.

Adrian. Further, the plaintiffs assert that Clare

directly perpetrated forced labor and human trafficking offenses

against Adrian. They contend that “[s]he obtained his

uncompensated labor and services (the establishment of a t-shirt

company) by means of the abuse or threatened abuse of law or

legal process (threat of deportation),” and “did this by means

of a scheme, pattern, or plan, which caused Adrian to believe he

would be deported to Mexico should he fail to obey her every

command.” Id. ¶ 282.

While the complaint recites the elements of a forced

labor offense, it alleges no specific facts to suggest that

Clare threatened to report Adrian to the immigration authorities

(or caused him to believe that he would be deported) if he

failed to perform labor or services. Although deportation is a

serious harm, see Adia, 933 F.3d at 93-94, the defendant must

have at least “intended to make [the plaintiff] believe that he

would be deported if he stopped working” for her. Anora v.

Oasia Pro. Mgmt. Grp., Ltd., No. 19-CV-11732, 2021 WL 11114539,

at *2 (S.D.N.Y. Aug. 31, 2021). Here, however, the complaint

alleges only that “[a]fter the Albany Times Union published a

series of articles about NXIVM, Clare and other members of NXIVM

leadership told Adrian to go into hiding so that he would not be

discovered by reporters or immigration authorities because it

would reflect poorly on Raniere and the NXIVM community if he

were caught.” Id. ¶ 70. In other words, the plaintiffs suggest

that Clare encouraged Adrian to avoid deportation because she

worried that his removal would harm NXIVM.

The complaint also asserts that “Clare and Raniere

knew Adrian did not have the immigration status necessary to

operate the [t-shirt] company, and that he would be unable to

demand compensation or seek other employment for fear of

retaliation and deportation or arrest.” Id. ¶ 68. Critically,

however, it does not allege that Clare ever invoked that

sentiment to Adrian, explicitly or implicitly. Thus, the

plaintiffs have failed to support the allegation that Clare used

the threat of deportation to compel Adrian to work without pay.

See Anora, 2021 WL 11114539, at *2 (“[t]ellingly, [the

plaintiff] does not describe any conversation in which [the

defendant] encouraged him to continue working” for his firm to

avoid deportation).

Camila & Daniela. Finally, the plaintiffs assert that

Clare is liable as a beneficiary for forced labor and human

trafficking offenses against Camila and Daniela. The complaint

alleges that “she knowingly benefited by receiving things of

value, including enhanced status, power, and prestige within

NXIVM, from participation in the Venture, which she knew or

should have known labor trafficked Camila and Daniela.” Compl.

¶ 284. “She knew or should have known the Inner Circle and

Defendant Raniere were forcing Plaintiffs Daniela and Camila to

perform menial tasks, administrative work, and commercial sex

acts,” the plaintiffs contend, “because she was a member of the

Inner Circle who conspired to commit forced labor offenses and

because she was in close and constant contact with other members

of the Inner Circle and Raniere.” Id.

As with the DOS Plaintiffs, Camila and Daniela’s

claims that Clare should have known of Raniere’s forced labor

scheme are plausibly pleaded at this stage and may proceed.

ii. Sara Bronfman

Camila asserts a TVPRA claim against Sara based on

predicate acts of forced labor and human trafficking, again in

violation of Section 1589 and Section 1590(a). She alleges two

bases for liability: direct and beneficiary. First, the

complaint alleges that Sara herself “provided and obtained

Plaintiff Camila’s uncompensated labor and services (babysitting

and teaching in RCG, which Defendant Sara Bronfman created and

funded) by means of a scheme, pattern, or plan, which caused

Plaintiff Camila to believ

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