ALBANY, N.Y. – Nancy Salzman, former president of the now-defunct group NXIVM, is facing a new lawsuit for allegedly failing to comply with a financial settlement intended to benefit the group’s victims. Nearly 70 plaintiffs, who initially filed a suit against Salzman, NXIVM founder Keith Raniere, and other former leaders in 2020, filed the legal action on Nov. 8 in the state Supreme Court in Albany County.
The 2020 civil case settlement required Salzman to sell three Halfmoon, N.Y., properties owned through a limited liability company, with proceeds going to victims. According to the agreement, victims would also approve the sale prices. The properties were sold for $167,500, $230,000, and $190,000, respectively. Based on the settlement terms, victims were to receive $155,687 from the net proceeds of the third sale.
Salzman, however, has withheld disbursement of these funds, citing more than $116,189 in capital gains taxes on the sales. The funds remain in escrow, with her lawyers awaiting court guidance. Plaintiffs’ attorneys argue that the settlement did not specify that Salzman’s tax obligations would reduce victim payouts.
Salzman was released from a federal halfway house earlier this year after serving about 20 months in prison. She was sentenced in September 2021 by U.S. District Judge Nicholas Garaufis to prison and fined $150,000 after a guilty plea to racketeering conspiracy charges.
Known as “Prefect” within NXIVM, Salzman co-founded the organization in 1998 alongside Raniere, who held the title “Vanguard.” Salzman played a pivotal role in advancing Raniere’s ideology but distanced herself from the “master/slave” subgroup DOS, which was central to the federal charges against Raniere.
Raniere was convicted in 2019 on multiple charges, including sex trafficking, and is serving a 120-year sentence. Other prominent NXIVM figures, such as actress Allison Mack and heiress Clare Bronfman, also pleaded guilty to charges related to the organization’s operations.
Salzman’s legal challenges underscore the continued repercussions following NXIVM’s 2018 collapse, a case that garnered widespread public interest due to the high-profile defendants and serious criminal accusations involved.
Credit: This article was originally reported by NoahWire and edited for publication by GP4.