The lawsuit was filed in federal court in Brooklyn Tuesday by more than 80 alleged victims seeking financial relief and a jury trial. Nxivm and its entities are also listed in the lawsuit.
The 192-page lawsuit suit accuses Nxivm leadership of conspiring to operate a criminal enterprise under the company umbrella. The defendants allegedly committed "sex trafficking, peonage, forced labor and human trafficking offenses" while enticing members to join a company that "functioned as both a Ponzi scheme and a coercive community," according to the lawsuit.
Nxivm touted itself as a coaching and educational business for corporations and individuals, but prosecutors say in the lawsuit that the company actually acted as a multilevel marketing pyramid scheme with a secret society involved in things like sex trafficking and "master-slave relationships."
Raniere, 59, was found guilty in 2019 of racketeering, racketeering conspiracy, wire fraud conspiracy, forced labor conspiracy, sex trafficking, sex trafficking conspiracy and attempted sex trafficking. He has been in federal custody in Brooklyn since his arrest in Mexico in 2018. He could be sentenced to life in prison, though it's unclear when the sentencing may happen in that case.
"Defendants exerted power over the Plaintiffs; took their money; made it financially, physically and psychologically difficult, and in some cases impossible, to leave the coercive community; and systematically abused Plaintiffs physically and emotionally," the suit said.
Raniere's lawyer, Marc Agnifilo, said the federal lawsuit actually helps his client's appeal of his conviction.
"It puts into perspective the plaintiffs' motivations in the criminal case," Agnifilo said of the suit. "It's very clear that these individuals who testified in the criminal trial, now plaintiffs in this lawsuit, are actually only motivated by the millions of dollars they seek to get."
Agnifilo accused the plaintiffs of being "motivated by greed, not the truth."
Psychological experiments, video of beheadings
Some cult members were subjected to a "human fright experiment" where they expected to hear a talk from Raniere on a video display but instead "were subjected to scenes of escalating violence including actual, extremely graphic footage of the brutal beheading and dismemberment of five women in Mexico," according to the lawsuit. The members had electrodes on their skulls to measure brainwaves during the "experiment," it said.
"The longer someone was immersed in this system, the more likely it became that they would suffer moderate-to-severe psychological and emotional injuries, including post-traumatic stress disorder and complex post-traumatic stress disorder," according to the lawsuit. "Many of the Plaintiffs in this action were injured in this way and still struggle with the effects of their time in Nxivm and exposure to Defendants' programs."
Nxivm programs were based on a system developed by Raniere and Nancy Salzman, who was the head of "this individual therapy branch" of the scheme, the lawsuit said. Despite having a nursing license and claiming to have a background in psychiatric nursing, the suit alleges that Salzman only worked in general practice for a year and was not licensed to practiced psychotherapy.
CNN sought comment from Salzman's attorney but has not heard back.
The Nxivm programs involved two components, according to the lawsuit.
First, "a self-esteem eroding curriculum designed to break down students' resistance to Raniere's and Nancy Salzman's radical reframing of ethics, morality, and gender roles and relations, among other things."
Second, "an inherently dangerous form of psychotherapy called 'Exploration of Meaning' (EM), which was administered by so-called EM Practitioners (EMPs), all of whom were unqualified to practice psychoanalysis, psychology or mental health counseling," according to the lawsuit.
Many worked, but "Inner Circle" earned
More than 16,000 people took the Nxivm courses, but fewer than 100 ever made any money from its businesses, according to the lawsuit. And fewer than 25 received substantial earnings within Nxivm.
"Most of the earnings were received by the small group collectively known within the organization as the 'Inner Circle,'" the lawsuit said.
The defendants would encourage students to work their way up a hierarchy to earn commissions -- but would expand the curriculum and grade students as failures so that they would not qualify for commissions, the lawsuit said.
The founder convicted but awaiting sentencing
Raniere drew thousands of followers by sharing his ideas on how to achieve success and happiness. In 1998, he founded a company called Executive Success Programs to "advance ethics, humanity, and critical thinking" that operated in the United States and Mexico.
He created Nxivm in 2003 and led several coaching and educational programs under the company's umbrella. His mission was teaching others about how to achieve true happiness, his lawyer, Agnifilo has said.
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