NXIVM ‘sex cult’ appears in New York court to be warned of depleting legal funds

Prosecutors question legal trust fund established by heiress of Seagram's liquor empire

Prosecutors questioned the details surrounding a legal defence fund established for the members of the alleged sex cult NXIVM by one of their fellow defendants in the ongoing case; a high-ranking member of the group and the heiress to a massive liquor empire.

The defendants were arrested last year and accused of having helped run a criminal enterprise for self-help guru Keith Raniere, who has been charged with sex trafficking.

They were ordered back to the Brooklyn Federal Courthouse “to address issues” Judge Nicholas Garaufis said he found when reviewing the irrevocable trust established by Clare Bronfman, heiress of the Seagram’s liquor empire and one of the defendants in the case, who is charged with racketeering conspiracy and conspiracy to commit identity theft.

The prosecutors questioned whether the trust, which provides legal defence funds to each of the six defendants, allowed Bronfman to have influence over the other members of NXIVM.

Federal prosecutors charged Bronfman, a high-ranking member of NXIVM, with racketeering conspiracy in an indictment unsealed in Brooklyn federal court. NXIVM president Nancy Salzman, her daughter Lauren Salzman and member Kathy Russell were also charged.

Raniere was accused in March of running a secret society within NXIVM, known as DOS or “the sorority,” in which women were branded with his initials, blackmailed and coerced into having sex with him.

Actress Allison Mack, best known for her role in WB Television’s Smallville series, was charged with helping Raniere recruit women.

Mack, along with Raniere and Bronfman, pleaded not guilty. The three have a trial slated for April.

On Monday, the judge said the group had already used nearly 75 per cent of the funds available in the trust. It was not immediately clear whether the judge would permit Bronfman to continue contributing funds or if the trust would be allowed to remain available for each of the defendants.

Prosecutors have said the NXIVM organization ran a series of “pyramid-structured” schemes, including expensive courses.

As for the sorority, the prosecutors alleged that upon joining members were required to provide so-called “collateral” that could be used against them if they tried to leave, including compromising information about family and friends, nude photographs and rights to their assets.

Reuters contributed to this report