The US Court of Appeals for Second Circuit today affirmed the trial conviction and 120-year sentence imposed on Keith Raniere for racketeering, racketeering conspiracy, forced labor conspiracy, wire fraud conspiracy, sex trafficking conspiracy, sex trafficking and attempted sex trafficking.
The Court issued a published opinion in which it went to great lengths to define the phrase “commercial sex act” and a summary orderr in which it rejected the remainder of Raniere’s arguments.
Every issue Raniere raised challenging his convictions was denied.
Now that he lost his appeal, Raniere’s hopes are pinned to his Rule 33 Motion for a new trial based on claims of FBI tampering.
Judge Nicholas G. Garaufis will review his Rule 33 motion which was stayed until the appeal was decided.
Raniere filed a motion before Judge Garaufis to disqualify based on Raniere’s claim that he is, or appears to be, biased against him.
If Judge Garuafis disqualifies himself. the Rule 33 motion will be heard by another judge.
Raniere can also appeal the 2nd Circuit’s decision to the US Supreme Court.
A review of the issues Raniere lost on appeal
Forced Labor
Raniere argued that the Government presented insufficient evidence to the jury to sustain his convictions for forced labor, forced labor conspiracy, and the racketeering act of forced labor of Nicole.
Raniere argued Nicole performed “personal favors and kind gestures” and not “labor or services.”
Quoting Merriam-Webster, the three judge panel ruled that “Labor includes the “expenditure of physical or mental effort, especially when fatiguing, difficult, or compulsory.”
Collateral Made It Forced
The judges found “collateral: forced the labor and that ‘slaves’ were forced to provide “uncompensated work by the threat of the release of their ‘collateral.'”
Camila
A hard drive seized in Raniere’s library had Camila’s photos.
Raniere argued the Government failed to prove he took photos of underage Camila.
Raniere argued that, at worst, the Cami photographs on his hard drive showed he was guilty of possession of child pornography.
Raniere argued no evidence was presented that he took the photos.
The judges ruled, “the jury was presented with ample evidence showing that Raniere began sexually abusing Camila in September 2005.”
They cited
emails and text messages between Camila and Raniere referring to the beginning of their sexual relationship as around September 2005
testimony from Daniela that she had spoken to Raniere about his sexual relationship with Camila at some point before the fall of 2006.
messages between Camila and Raniere specifically referencing Raniere’s creation and possession of the November 2005 photographs.
And the electronic folder containing the photographs of Camila also contained nude photographs of other women with whom Raniere had a contemporaneous sexual relationship.
Conspiracy to Alter Records
At trial, Mark Vincente testified he altered video tapes—which were produced in discovery as part of NXIVM Corp., et al., v. Ross Institute, at Raniere’s direction.
Raniere argued the Government did not provide sufficient evidence to prove
Vicente acted with criminal intent.
The judges ruled Vincente himself testified that he knew the deleted content of the tapes would have been damaging to NXIVM in an ongoing “legal action” and that the alteration of the videos was “illegal.”
Pam Cafritz’s Credit Card
The Government charged Raniere with using Pam Cafrtiz’s American Express card after she died—to evade tax obligations.
Raniere argued the Government offered no evidence he failed to pay taxes.
The judges wrote Raniere does not understand the statute. The Government does not have to prove Raniere committed tax evasion.
Raniere argued there was nothing illegal about using Cafritz’s credit card, because he was the executor and sole beneficiary of Cafritz’s $8 million estate.
The judges ruled “Raniere does not present a developed argument explaining why being the executor and beneficiary of an estate gives one lawful authority to use a deceased person’s credit card.”
Inner Circle Not Racketeering
Raniere argued the government did not prove his “inner circle” was a RICO enterprise/. The “inner circle” did not share a “common purpose” other than loyalty to Raniere, he said.
The indictment alleged the enterprise operated “to promote [Raniere]… and to recruit new members into the Pyramid Organizations [i.e., NXIVM and DOS].”
Members of “the enterprise expected to receive financial opportunities and personal benefits, including increased power and status within the Enterprise.”
The judges ruled the Government presented evidence that members of the enterprise recruited members and received benefits.
Raniere argued the Government failed to establish a “pattern of racketeering
activity.” The judges ruled “eleven predicate acts listed in the Indictment were linked to the enterprise.”
Abortion and texts
Raniere challenged Judge Garaufis’ decision to allow the introduction of
communications between Raniere and Camila;
evidence that Camila, Daniela, and Marianna had abortions after being impregnated by Raniere;
photographs of women’s genitalia taken by Raniere.
He argued these were unduly prejudicial compared with their evidentiary value.
Raniere challenged the admission of voluminous and selectively culled WhatsApp messages between Raniere and Camila because they were “gratuitous sexually-graphic conversations,” and portrayed Raniere as “manipulative, controlling[,] and emotionally abusive.”
The judges ruled the texts supported the Government’s claim that Raniere began a sexual relationship with Camila when she was 15 and founded DOS.
Abortion
Raniere challenged the judge’s decision to admit testimony, medical records, and ultrasound images—that Daniela, Camila, and Marianna had abortions, arguing that such evidence was prejudicial.
The judges ruled “the abortion material was probative of Raniere’s sexual relationship with Camila when she was a minor.”
The abortion evidence also showed that Cafritz—a member of the RICO enterprise, who helped procure the abortions – “facilitated the abuse of Camila and Daniela.”
167 Photographs of Adult Women’s Genitalia on Hard Drive
FBI photograph of the hard drive.
Raniere challenged Judge Garaufis’ decision to admit 167 photographs of
women’s genitalia found on the hard drive that contained images of the child Camila.
Raniere argued the 167 photos was highly prejudicial and of little use as evidencde.
The judges pointed out that Raniere had already argued that the existence of explicit images of Camila on the hard drive was not sufficient to establish he took the photographs of her.
The judges ruled the timeframe the photos were taken, and the 11 subjects, all women with whom Raniere had a sexual relationship, was evidence that Raniere took the 12th female in the folder, Camila, and also evidence that he had had a sexual relationship with her while she was a minor.
Prohibition on Use of Full Names
At trial Judge Garaufis ordered that “testifying victims” be identified by “a nickname, first name, or pseudonym only” and “non-testifying DOS victims” be “referred to solely by first name”.”
Raniere argued this violated his rights under the Confrontation Clause of the
Sixth Amendment and his due process rights under the Fifth Amendment.
Raniere also argued that withholding the witnesses’ last names bolstered their credibility by endorsing their status as victims.
The judges ruled Raniere failed to present a need for the witnesses’ last names to be disclosed publicly, since he knew their identities.
The judges ruled Garaufis covered this with a jury instruction that jurors should “not make any inferences as to the defendant’s guilt or non-guilt from the fact that certain last names are being withheld from [the jury] and the public.”
Termination of Lauren’s Cross-Examination
Lauren Salzman and Keith Raniere when she was enamored with him.
Raniere argued Judge Garaufis improperly terminated Lauren Salzman’s cross examination, violating his Sixth Amendment right to confront his accuser and his
Fifth Amendment right to due process.
The judges pointed out that the Government “offered to the defense to make any of its witnesses available” to testify if Raniere put on a defense. That included Lauren Salzman.
The judges ruled the “error was harmless.”
Raniere “declined to put on a case,” the judges ruled, he “suffered no harm” from the decision to cut off Salzman’s cross-examination.” He could have examined her at length if he chose.
Sex trafficking of Nicole
Nicole joined DOS as a “slave” in February 2016. She provided collateral of letters she wrote falsely alleging sexual abuse by her father and other damaging accusations, a sexually explicit video of herself, credit card authorizations and the right to her grandmother’s wedding ring.
Mack “assigned” Nicole to contact Raniere and tell him she would do “anything he asked.” On May 31, 2016—Mack instructed Nicole to meet Raniere.
Raniere blindfolded Nicole, led her into a car, and drove her to a house. He then led Nicole—blindfolded— inside a townhouse. There, he instructed her to undress and tied her to a table. Camila, whose identity was unknown to Nicole, performed oral sex on Nicole.
Nicole was laid on this table, nude and blindfolded. Camila entered and performed oral sex on her. Raniere watched and spkoke to Nicole. He got 40 years for that incident.
Afterward, Nicole told Mack about the incident, and Mack called Nicole “really brave.”
Raniere got 40 years of his 120 year sentence for this incident.
Mack required Nicole and other “slaves” to pose for nude photographs, including close-ups of their genitalia.
Mack recruited another “slave,” India, who recruited a third-line “slave,” Jessica Joan, who used the nickname Jay, but later came out with a book and podcast.
Joan provided “collateral” to India, including a sex tape and a video describing abuse to which she was subjected as a child. She provided further “collateral” monthly.
Joan was required to perform uncompensated services for Mack, including cleaning her house, doing her laundry, and picking up her groceries.
One day, Mack gave Jay a “special assignment” to “seduce” Raniere and “have him take a naked picture” of Joan. She refused to carry out the assignment and left DOS.
Biggest Argument
The centerpiece of Raniere’s appeal arguably was his challenge to the sex trafficking of Nicole.
Raniere argued over the meaning of “commercial sex act,” found in Section 1591, and defines as “any sex act, on account of which anything of value is given to or received by any person.” 18 U.S.C. § 1591(e)(3).
Raniere argued that evidence the Government submitted showing that individuals received privileged positions within DOS or NXIVM “on account” his incident with Nicole is insufficient to sustain sex trafficking, because a “commercial sex act” “thing of value” must have a financial component and the sexual exploitation must be for profit.
Raniere argued that “anything of value,” means “economic benefit” and no one made money from the Nicole blindfold incident.
Did Keith Raniere pay Allison Mack something of value “on account of” setting up Nicole and Raniere.
The judges concluded that Section 1591 does not require a “thing of value” to have a monetary component. They ruled Section 1591 does not explicitly define “anything of value.”
The judges analyzed the prefix “any” in the phrase “anything of value.” They wrote that their “understanding of ‘anything of value’ is guided by the meaning of ‘any.’”
They quoted Congress’s definition of “commercial sex act”—as “any sex act, on account of which anything of value is given to or received by any person.” 18 U.S.C. § 1591(e)(3). The judges pointed out that the word “any” is used three times.
Congress’s repeated use of “any” in its definition of “commercial sex act” supports “an expansive understanding of … ‘anything of value,’” the judges wrote.
Next, they turned to the phrase, “thing of value” and found that “things of value” included “amusement,” “[s]exual intercourse, or the promise of sexual intercourse,” “a promise to reinstate an employee,” “an agreement not to run in a primary election,” and “[t]he testimony of a witness.”
The phrase “thing of value,” the judges ruled, includes intangibles.
The judges wrote “adding the expansive prefix ‘any’ onto ‘thing’ only underscores our
understanding that ‘anything of value’ should be broadly understood to include intangibles.”
Next the judges considered the word “value” and construed “value” as what the recipient attaches to what is sought to be received. The judges referenced Webster’s Third New International Dictionary (1976), writing “This conforms with the dictionary definition of ‘value,’ which includes ‘relative worth, utility, or importance.”
The judges wrote “‘monetary worth is not the sole measure of ‘value.'”
Evidence Not Lacking
Raniere argues the Government failed to provide evidence that “anything of value” was received or given in connection with a sex act.
The judges defined the value received
They ruled that “DOS ‘masters’ including Mack, obtained ‘things of value’ in connection with assigning their DOS ‘slaves’ to engage in sexual acts with Raniere…. Mack was able to maintain and strengthen her privileged position in the DOS hierarchy because of the relationship between Raniere and… Nicole…. Raniere set an expectation that DOS ‘masters’ would receive approximately 40 hours of ‘work’ per week from their various ‘slaves’… ‘masters’ who were able to recruit a sufficient number of ‘slaves’
would qualify for a ‘special position’ and receive ‘special privileges’ from Raniere…
“Furthermore, the Government presented evidence that Raniere authorized certain payments to Mack for her work as ‘head trainer’ at the same time that Mack encouraged a ‘slave,’ India, to ‘complete [an] assignment’ involving ‘tak[ing] all her clothes off, while [Raniere was] clothed, pos[ing] in the most revealing way, and
hav[ing Raniere] take a picture of her’.”
Raniere argued that “[m]aintaining a spot in the first line” of DOS cannot constitute “anything of value.”
The judges ruled that a privileged position in an organization may constitute intangible “value” and in DOS benefits included free labor from “slaves.”
Raniere argued that even if things of value were given or received, they were not given or received “on account of” a sexual act.
When Raniere blindfolded Nicole, ordered her to undress, and tied her to a table and had Camila perform oral sex on her in Raniere’s presence, Mack—did Nicole’s “master”—received something of value, “on account of” the sexual act?
The judges ruled Mack’s receipt of things of value was connected to assigning “slaves” to engage in sexual acts with Raniere, including the Nicole blindfold incident.
The judges wrote the Government established Mack received things of value “on account of” her assigning “slaves” to engage in sexual acts with Raniere [which] was “that Mack’s privileged position in DOS was causally connected with her ‘assignment’ of Nicole to Raniere for sexual purposes.”
Raniere argued there was no evidence the sex acts were “coerced.”
The judges defined “coercion” as “threats of serious harm,” and “serious harm” as “physical or nonphysical, including psychological, financial, or reputational”.
Nicole testified she felt she had “[n]o choice” in complying with Mack’s instruction to “tell [Raniere] that [she] would do anything that he asked [her] to do.” because of her “collateral” to Mack.
Nicole testified she understood that breaking her “commitment” to DOS and her “master” would mean her “collateral” would be released.
The judges wrote, “Any rational trier of fact could have found coercion beyond a reasonable doubt.”
Non Pattern Jury Instruction
The three judge panel also ruled on was the non-pattern jury instruction for sex trafficking.
Raniere argued Judge Garaufis erred in his instructions to the jury on the sex trafficking counts by changing the wording of the statute, at the Government’s request, and over the defense’s objection.
Instead of using the statute’s language, which is a ‘commercial sex act’ is any sex act on account of which anything of value is given to or received by any person,” the judge substituted the words “on account of” with “because of.”
Raniere argued the judge changed the language because he wanted to change the meaning of the law to fit the conduct, which otherwise was not sex trafficking.
Raniere argued the phrase “because of” “means a ‘connection to’ or a proximate causational relationship to.” But the statute’s “on account of” means there is a “quid pro quo.”
The judges acknowledged the statute, 18 U.S.C. § 1591(e)(3), uses the phrase “on account of,” not “because of.” But they wrote they found “no meaningful difference” between “on account of” and ‘because of” and that they are “virtually indistinguishable.”
By this, the 2nd Circuit apparently ruled that if a trial judge finds no difference in meaning, he or she can creatively change the wording of the statute when defining the law to the jury.
