Going for Broke

Former Nxivm insider, Barbara Bouchey, says that she was driven into bankruptcy

In October 2003, Saratoga Springs based financial planner Barbara Bouchey told a reporter from the local daily that the training people receive from her company, Nxivm, gives them results that they “have never experienced before. . . . People can’t explain it.”

Bouchey was one of Nxivm’s most prominent and active local boosters. Inside the operation, she was a key player, a leader within the management, and high in the organization’s seemingly arbitrary and strict hierarchy. According to sources, Bouchey was even the original organizer of Vanguard Week, the weeklong celebration surrounding the birth of Nxivm’s founder, Keith Raniere.

She was also Raniere’s girlfriend.

Now, after nearly seven years with the company, Bouchey has become a pariah among her former colleagues, and has joined the embattled ranks of Nxivm critics. Her explosive affidavit filed earlier this year is a key document in a court battle being waged over a California real-estate deal between a former business associate of Raniere’s and Seagram’s heiresses—and Nxivm benefactors—Clare and Sara Bronfman. In the affidavit, Bouchey alleged that Raniere is a compulsive gambler who burned through roughly $65 million of the Bronfmans’ considerable inheritance on commodities trading.

On June 11, Bouchey, a former financial adviser whose firm dealt solely with clients with at least $1 million to invest, declared bankruptcy. She is claiming $2.5 million in undisputed liabilities, including a personal loan of $1.3 million from a longtime Nxivm member, Michael Sutton. Among her disputed creditors, she listed her former clients the Bronfman sisters.

Bouchey is arguing in her filing that she was driven into bankruptcy by the Bronfman sisters, who have chased her through four court cases in three states in an effort to extract any and all documents generated while she managed some of their financial affairs. The sisters are claiming that Bouchey has disseminated these documents to the press and to hostile lawyers in an effort to embarrass, discredit and injure them.

Bouchey is arguing that she has already surrendered all original documentation to the sisters, and that all she has left are copies—copies, she claims, that she is legally bound to keep. Bouchey alleged that the reason the sisters are so adamant to secure these records is because they contain evidence that the sisters have engaged “in a myriad of activities that are questionable and, in some cases, potentially illegal.”

According to a filing made by Bouchey’s lawyer, Richard Croak, “Clare and Sara Bronfman are members of the Nxivm cult. The debtor, Barbara Bouchey, is a prior cult member. Over the years it has been the cult’s modus operandi to harass former members with frivolous law suits.”

Multiple attempts by Metroland to contact representatives of Nxivm have gone un-returned.

Bouchey has chosen not to speak with the press, yet multiple sources attest that she has contracted the service of a New York City-based public-relations firm in an effort to control her image. Numerous national media outlets have begun to gain interest in the story of the millionaire heiresses and their financial backing of an alleged cult. Sources say that reporters representing New York magazine, Vanity Fair, and even 20/20 have begun preliminary research. A reporter from Canada’s Maclean’s is also working on the story.

The courtroom is not a new place for Nxivm’s critics and former members to find themselves. Rick Ross, the controversial “cult deprogrammer,” has been in legal battles with Nxivm for years. Joe O’Hara, a former Nxivm employee, declared bankruptcy after being accused of stealing $2 million from the Bronfman sisters. According to sources, Susan Dones, owner of a Nxivm training center in Tacoma, Wash., and her business partner are preparing to declare bankruptcy.

And Toni Natalie, a former girlfriend of Raniere’s, spent eight years and four months in bankruptcy court, as she put it, defending herself from Raniere. The case ended in her favor, with Judge Robert Littlefield, the same judge whom Bouchey is before, concluding, “This matter smacks of a jilted fellow’s attempt at revenge or retaliation against his former girlfriend.”

“It is my belief, and in part the belief of the court, that this action against Barbara is being directed by Keith,” Natalie said, “in order to keep her tied up in the legal system for as long as possible. That’s exactly what they did to me.”

Natalie alleged that Raniere uses the court system—and other people’s money—to win wars of attrition with his enemies. “With the many high-powered lawyers and the many legal battles they have brought on, are in now, and most likely will continue, this seems to be their weapon of choice to silence people.”

—Chet Hardin

chardin@metroland.net

(Correction: In the print article, Judge Robert Littlefield was incorrectly referenced as Judge Richard Littlefield.)

Oil Spill Blues Photo: Chet Hardin

Members of MoveOn.Org rallied Tuesday outside the offices of Sens. Kirsten Gillibrand and Chuck Schumer and Rep. Paul Tonko in Albany to “thank them for their support of Clean Energy legislation, and legislation that prevents a Big Oil bailout paid for by taxpayers and eliminates the cap on what BP will have to pay to clean up the spills they’ve caused.” The activists called attention to the cozy relationship Big Oil has fostered with the federal government over decades. A similar protest is planned for this evening outside the Saratoga Springs office of Rep. Scott Murphy.

Home Again

Albany County legislators clash over a vote on the future of a foreclosed Center Square property

On Monday, the Albany County Legislature voted to give a former Center Square resident a second chance to own her foreclosed home. It was a success story, said legislator Shawn Morse. “The best-case scenario is that the person who fell on the hard times is able to buy, and keep, their house,” Morse said.

Six years ago, according to Morse, Pauline Dryden Neilson, the owner of 313 Hudson Ave., had fallen on hard times, and vacated her property under difficult personal circumstances. She let the house fall into disrepair. Significant back taxes accumulated.

Late last year, Albany County began the process of filing foreclosure judgments for properties with delinquent taxes from 2004, and 313 Hudson was in this group. During a tax amnesty program, Neilson made a payment of $13,000 of the $32,000 owed, but by March 2010, the county had taken ownership.

In April of 2010, Neilson came back to the county to pay for the remaining debt with the money from a life insurance plan, Morse said, but this payment could not be accepted due to the foreclosure. Neilson was told that she would need legislative approval to be allowed to buy back her house. So she contacted the legislature asking for the right to repurchase the property after almost six years, and Morse said that he was more than happy to afford Neilson a second chance.

“I think the right thing to do is give the lady her house back,” he said. Morse, along with other members of the legislature’s leadership, put forward the legislation Monday night that would sell Neilson her house. The bill passed by an overwhelming majority, despite the complaints of legislator Chris Higgins, who represents the Center Square neighborhood.

Higgins was one of only two legislators to vote against selling the building back to her. “This woman is not a good neighbor, she is not a good property owner, she has not lived in this building for over six years as far as I can tell,” he said. “She has allowed it to fall apart essentially.”

Neilson did not attend Monday night’s meeting and could not be reached for comment.

Typically, after three years of unpaid taxes and neglect have occurred on a city property, the county is free to begin processing the foreclosure of the property.

Once the property has been foreclosed, the county puts it up for auction through the Albany County Real Property Auction. It does not necessarily go to the highest bidder; bidders must fill out a form specifying their intended plans for the property, expected time of rehabilitation, their monetary means of achieving their goals, and disclosure of previously purchased property from the county for restoration.

“For whatever reason, now I’ll give her the benefit of the doubt maybe some hard times have fallen on her, but she hasn’t paid her taxes,” Higgins said. “The county should not be rewarding bad behavior. Allowing a person the right to a property that is no longer legally theirs, when they have already let it fall into disrepair before, could lead to more of the same.”

Higgins pointed out that there were other bidders interested in the house, including a businessman willing to pay $90,000.

“The other issue I have,” Higgins said, “is this is a unique neighborhood; it is a historic neighborhood. I live on Hudson Ave. I live right down the street from this property. These buildings are all attached to one another, they’re row houses, and when one property owner doesn’t take care of their house it affects adversely the property owners who have the adjoining buildings. And they should not have to bear responsibility on another house.”

“The difference between Chris Higgins and myself,” said Morse, “is that I believe the county government has always existed as a government who helps people in their trying times in life. And we’re not in the business of stealing people’s houses so that a company can buy and make a profit and sell them. I’m not going to do that on the back of somebody who’s been through some tough times in life, been in a rut, who has clawed her way back out and now has probably taken every dime she has to pay back these back taxes, penalties and fees and bought her house back.”

“I still think that it’s amazing that 35 of my colleagues chose to give this property back to a delinquent home owner without even hearing from her personally—it flies in the face of what I would say is common sense,” said Higgins. “As the resident and representative to this area, I’m in the best position to judge whether or not this property should go back to the homeowner. And I didn’t think it was appropriate in this case.”

—Fred Wills

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