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Feds Intend To Keep $500K Seized From Nxivm 'Sex Cult'

Dashed Arrow Bebeto Matthews/AP/Shutterstock

Members of the Nxivm sex cult reportedly kept a lot of petty cash on-hand, stashing more than half a million dollars in bags and shoeboxes stored inside a co-founder's house. Now, the NY Post reports, prosecutors have applied to keep that money, should they win their criminal case against the cult's leaders.

FBI agents seized the cash—which the Post says amounts to $515,577 and the Times Union previously reported as over $520,000—in March, when they raided Nxivm co-founder Nancy Salzman's house in Halfmoon, New York. At the time, they also found smaller sums of Mexican and Russian currency, along with a large haul of electronics tied to the cult. The raid occurred in tandem with a bust of leader Keith Raniere's nearby townhouse, which prosecutors say served as the site of much of the sexual abuse Raniere allegedly perpetrated against women who belonged to his shadowy group.

The government also intends to take that property, which Raniere dubbed "The Library," along with Salzman's residence and another Nxivm building. Typically, when the government seizes assets in a criminal case, it's supposed to pump them back into civic coffers: The FBI, for example, optimistically says it uses that money for social welfare programs, to improve community policing, to support drug use prevention and overdose response efforts, and similar initiatives. In many cases, though, these may be ill-gotten gains. The forfeiture system allows authorities to garnish cash and valuables associated with unlawful activities: In civil forfeiture cases, police can impound assets during an arrest, and keep them even when the accused is innocent. Here, however, we're talking about a criminal forfeiture case: Prosecutors will require a conviction before they can claim ownership of Nxivm's assets.

Salzman was arrested and slapped with racketeering and trafficking charges in July, alongside her daughter Lauren, Seagram's heiress Clare Bronfman, and bookkeeper Kathy Russel. All four women stand accused of helping Raniere, formerly a multilevel-marketing entrepreneur who positioned himself as a sort of spiritual leader, recruit women into what they describe as a self-help group and what experts describe as a cult. They also helped induct some of those members into an esoteric subgroup wherein they became sexual "slaves," obligated to service Raniere. According to the Post, Salzman allegedly engineered the "Explorations of Meaning" course the NY Times has billed as an "intense, hypnotic, secret-telling session" that served to foster Nxivm loyalists. Some of the group's notorious member brandings allegedly took place in her home.

Authorities arrested Raniere in March, after sniffing him out of his hiding place in Mexico. Former Nxivm members attest that Raniere, with support from his inner circle, forced them into servitude, and placed them on hyper-restrictive diets; that he degraded, humiliated, and raped them. He was indicted on sex trafficking and forced labor conspiracy charges, as was his right hand—Smallville actress Allison Mack—after she was arrested in April.

So far, everyone has pleaded not guilty, and the Nxivm trial is scheduled to begin on March 18, 2019.

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