In a June 12 court hearing, Raniere was denied bail, after offering an elaborate package of $10 million in cash plus offering to provide his own force of armed guards around the clock to keep him from violating any of the bail conditions. In the hearing, the prosecution remarked that a superseding indictment would be issued with additional charges against Raniere and with charges against additional defendants.
The second shoe dropped on Tuesday, June 24, with significant additional charges, and four additional defendants. In addition to Raniere and former actress Allison Mack, the complaint added Nancy Salzman, the #2 in Nxivm and her daughter Lauren, Seagram liquor heiress Clare Bronfman and Kathy Russell, the longtime bookkeeper for Nxivm. Most of the new charges have to do with identity theft to commit other crimes, and the indictment also says that the government is looking to seize ill-gotten gains from the scheme. It appears that the indictment now categorizes Nxivm as an “enterprise,” language usually used to bring in the RICO statute, which enhances penalties for individual crimes when committed by an organized criminal group.
The Nxivm saga is fascinating, because it suggests that small cults can be extremely wealthy, can buy significant influence internationally, and can significantly harm members. What’s unfolding for Nxivm is not a direct foreshadowing of what may happen to Scientology, but it does show that the government is able to unleash significant legal firepower against organizations who flout the law with such impunity once the usual government inertia has been disrupted. The impossible-to-predict issue is just when that threshold is crossed. Continue reading “Nxivm Cult Meltdown Continues: New Charges, New Defendants”
We view this as a positive sign that the EU will allow member states to use the General Data Protection Regulation, the comprehensive privacy law enacted in May of this year, to restrict Scientology’s activities. We published an extensive article in May that showed how Hubbard’s sacred “admin tech” mandated actions that could never be in compliance with GDPR, providing an easy way for critics and former members to affect the operations of Scientology inside the EU.
While the JWs may be able to modify their data collection practices to comply with the EU rules, we believe that Scientology will not, because all of its self-help practices depend on collection of large amounts of personal data, and there is no way for a former member to insist on return or destruction of files such as pre-clear folders.
In Part 4 of our series on Scientology financial crime, we conclude our look at the evolution of Scientology as a criminal enterprise, specifically at how Scientology’s many rackets have evolved over the last 20 years or so under the authority of David Miscavige. Having essentially abandoned auditing in favor of less risky income streams, we look at the “Golden Age of Tech,” “Super Power” and other scams such as the “Ideal Org” real estate portfolio racket and their place within the criminal enterprise that is Scientology in the 21st century. Lastly, we’ll examine Scientology’s vulnerability in the post-9/11 era of financial regulation. However, before we return to examining David Miscavige’s and Scientology’s behavior during the Lisa McPherson trial that we described in Part Three, it’s important to establish some additional contextual understanding of several key events in the mid to late 1980’s that influenced not only church behavior during the McPherson trial, but also served to shape the church’s behaviour and culture within Scientology into the present day. Continue reading “Scientology Financial Crime Part Four: Miscavige’s Golden Age of Grifting”
In Part Three, the penultimate segment in our examination of the third era in Scientology’s criminal evolution, we’ll look at how David Miscavige’s assumption of power reflected a continuation of Hubbard’s obsession with Scientology’s ruthless utilitarianism, as well as how Miscavige’s own violent, thuggish temperament reflected a Gotti-like use of fear as his primary mechanism of control. We’ll also examine how Scientology’s use of the legal system shifted from the harassment-focused days of Hubbard to a more nuanced strategic approach, as well as how several key incidents that occurred under Miscavige redefined how Scientology’s La Cosa Nostra (“This thing of ours” or “Our thing”) -like mindset operates to this day. Continue reading “Scientology Financial Crime Part Three: Miscavige’s 20th Century Mob”
Earlier this week, Keith Raniere, the leader of Nexium (pronounced “Nexium”), a cultic group headquartered in Albany, New York, was arrested in Mexico after fleeing the US and swiftly extradited back to the US for trial. He’s accused of sex trafficking in conjunction with a secret “sorority” made up of Nxivm members who agreed to function as slaves for him, and who were branded in their pelvic region with his initials. There are other investigations pending that may result in further charges.
Though Nxivm never achieved the success of Scientology in its 20-year history, there are some interesting parallels between Nxivm’s modus operandi and Scientology’s as well as some parallels between Keith Raniere and L. Ron Hubbard’s claims about themselves. We look at some of these parallels and try to determine whether there’s any way to use the accelerating collapse of Nxivm to predict the endgame for Scientology, particularly in seeing how activists can target their efforts to hasten its demise. Continue reading “NXIVM Cult Leader Arrested: Parallels with Scientology?”
We take another look at how Scientology misuses R-1 religious worker visas as it attempts to fill slots in its operations. It’s no longer able to bring on enough new domestic recruits or even US citizen children of current members to staff up Flag, Pac Base and its other major operations. We look at the line between accidental stretching of the bounds of the program and outright fraud. Several reports suggest that Scientology misuses the “guardianship” provisions of the law to mistreat younger R-1 visa holders, crossing the line into human trafficking. Continue reading “Scientology’s Continuing Abuse of Religious Visas, Human Trafficking and the Farce of Guardianship”