Sep 25, 2018

FBI sifts mountain of data in NXIVM's seized computers

FBI and state police take computers and other evidence from the home of NXIVM co-founder Nancy Salzman which was raided by federal agents on Tuesday, March 27, 2018, in Halfmoon, N.Y.
Government said outside vendor hired to help with data search
Brendan J. Lyons
Albany Times Union
September 24, 2018

ALBANY — The Justice Department has hired an outside vendor to help the FBI sift through a virtual mountain of data contained on computer devices that were seized in March from two Halfmoon residences associated with NXIVM's co-founders, Nancy Salzman and Keith Raniere.

Federal prosecutors estimate the computer devices contain up to 12 terabytes of data, and have noted that a U.S. Circuit Court in Manhattan has characterized one terabyte of data as being the equivalent of "12 library floors' worth of books."

The processing of the devices includes placing attorney-client privileged records into a "firewall database," where they are being reviewed by law enforcement officials not involved in the investigation. Also, some of the computer devices could not be searched "for technical reasons" and have been sent to the FBI's headquarters for analysis, prosecutors said Monday.

The evaluation of the data has been slowed, in part, because some of the computer devices contain a multitude of records that involve approximately 75 attorneys who have done work for Raniere, Salzman and Clare Bronfman, a liquor-fortune heiress and NXIVM's longtime operations director, prosecutors said.

A superseding indictment unsealed July 24 charged Raniere, Salzman, Bronfman and three others involved with the secretive organization of running a criminal enterprise that engaged in crimes including money laundering, extortion and obstruction of justice.

"The superseding indictment charges six defendants in a variety of crimes including a racketeering conspiracy spanning 15 years," prosecutors wrote in a recent filing. "The crimes alleged in the indictment relate to over a dozen separate schemes, including schemes involving sex trafficking, forced labor, document servitude, illegal entry, identity theft, obstruction of justice, money laundering and wire fraud."

A federal judge has scheduled jury selection for the trial to begin on Jan. 7 in Brooklyn. Attorneys in the case have estimated the trial could last up to three months.

The other defendants in the case are television actress Allison Mack, Salzman's daughter Lauren, and Kathy Russell, a longtime bookkeeper for NXIVM.

The computer and other electronic devices were seized when FBI agents raided Nancy Salzman's Saratoga County residence six months ago. They also seized more than $520,000 in U.S. currency that was stuffed in bags, envelopes and shoeboxes, including one shoebox that held more than $390,000, according to search warrant records unsealed this summer in response to a request by the Times Union.

The records indicated FBI agents who scoured Salzman's Oregon Trail residence in Halfmoon also seized computers, data-storage devices, cameras and mobile phones, and small sums of Mexican and Russian currency.

A second search took place that day at a nearby townhouse on Hale Drive in the Knox Woods subdivision that prosecutors have alleged was used for years as a private sex lair by Keith Raniere. The items seized there included audio-video recording equipment, a box of unidentified white pills, computer storage devices, binders, VHS tapes, and a book titled "History of Torture."

But federal prosecutors, in their letter to the district court on Monday, noted that they are still receiving information from outside sources and indicated it will be challenging to process all of the potential evidence in the next three months.

The seven-count superseding indictment unsealed in July charged the six defendants with crimes that include identity theft, harboring of aliens for financial gain, forced labor, sex trafficking and wire fraud. They have all pleaded not guilty.

The charges allege they took part in recruiting and grooming sexual partners for Raniere and of using "harassment, coercion and abusive litigation to intimidate and attack perceived enemies and critics of Raniere."

The indictment, which describes NXIVM as having been run as a type of pyramid scheme, alleges that the defendants encouraged "associates and others to take expensive NXIVM courses, and incur debt to do so, as a means of exerting control over them and to obtain financial benefits for the members of the enterprise."

NXIVM and its associated business entities took shape in the Capital Region in the late 1990s. Under the direction of Raniere and Salzman, NXIVM's longtime president, the "self-help" organization built a following that included actors as well as the wealthy and politically powerful.

NXIVM has been described by some experts as a cult. Through the years the organization developed a reputation for aggressively pursuing critics and defectors who broke from its ranks, including using litigation to punish critics of Raniere, the organization, or its training methods.

The six defendants have all been described as flight risks by federal authorities; their conditions of release include home detention and electronic monitoring.

Nancy Salzman was revealed as a target in the probe when FBI agents raided her residence as part of their widening investigation of NXIVM's business dealings.



https://www.timesunion.com/news/article/FBI-sifts-mountain-of-data-in-NXIVM-s-seized-13254160.php

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