4.Anthony Valenziano — Direct (Part 1)

ANTHONY VALENZIANO: Sure. I will have to give some context. The action arose in approximately starting in 2000 and I'll give some background. Ms. Franco is Morris Sutton's daughter. Rochelle Sutton is Morris Sutton's wife. Rochelle was Stephanie's stepmother. The Suttons had a son by the name of Michael Sutton who started taking NXIVM courses I believe in 2000. Michael tried to persuade Stephanie to take NXIVM intensives starting in 2000.

Ultimately at some point in time, both Michael Sutton and Nancy Salzman came down to Jersey where the Suttons and Ms. Franco lived to try to persuade not just Stephanie but other members of the Sutton family to attend NXIVM intensives. There was a presentation given. Ms. Saltzman made reference to a radical new technology called the Rational Inquiry Method which the NXIVM intensives are based on. She represented to Ms. Franco and others that it was much different than any other courses that were out there in terms of self-improvement; that it could cure blindness, induce weight loss and that it was taught by Mr. Raniere and that he was the smartest man in the world and he had taught over 400,000 people and the like. And Michael also was trying to persuade Stephanie as well.

Stephanie ultimately agreed to attend. Ms. Franco had a long history of attending classes such as neurolinguistics programming. I'll use NLP. So she was interested in going based on her prior experience. She wanted to do something different and Ms. Saltzman represented to her that it was much different.

Ms. Franco attends an intensive in Albany, New York starting in June of 2001. As part of the process she signed an application and credit card authorization authorizing them to charge her credit card approximately $2,200 to attend the five-day intensive. As part of that, she had agreed not to disclose certain materials she learned at NXIVM for her own financial benefit, effectively.

She goes to Albany in June. She receives a binder of materials. It's a three-ring binder which included coursework and reading materials on the intensives. She uses the binder at the intensive. She extends her stay for another eleven days. She stays a total of 16 days. During the intensives, she, as part of the litigation claimed that certain representations were made that startled her, one of which was, I believe, Mr. Raniere had said that taxes should be optional, that also he disclosed an issue regarding his involvement in Consumer Byline which was an entity that was ultimately shut down by the State of New York by consent decree.

ANTHONY VALENZIANO: Ms. Franco ended up leaving the intensive after 16 days. She took the binder home with her. No one had asked her to return it. She ends up going back for another five days of intensive work in August of 2001. She does not interest her. She decides to leave and she puts the binder in her closet. Several months later the Sutton family was increasingly concerned with Michael Sutton's detachment from the family and one of the Sutton relatives had sought the help of Rick Ross to see if they could get Michael to stop going to NXIVM.

As part of this process there was a discussion whereby someone raised that Stephanie still had her binder. One of her family members asked her for the binder. She provided the binder to them which was in turn provided to Mr. Ross.

Mr. Ross then turned the binder over to two professors who were tasked with writing three articles critiquing NXIVM's practices and methods against some sort of framework to determine whether or not it was cult-like. Those articles were prepared and posted on Mr. Ross' website in the late spring of 2003 and shortly thereafter the lawsuit was filed.

ANTHONY VALENZIANO: Both Morris and Michelle passed prior to the termination of the claims against them. They were ultimately dismissed by way of summary judgment, I believe, in 2017.

Ms. Franco had one outstanding claim against her at the time when the Suttons were dismissed -- their estates were dismissed.

ANTHONY VALENZIANO: Sure.

Parties, when they're sued or assert claims, are entitled to serve requests, written requests for documents or written responses to questions and they're generally limited. And we, you know, as part of any Federal litigation we're involved in, the firm served written requests on NXIVM for documents and written responses to questions.

ANTHONY VALENZIANO: For a couple reasons.

Ms. Franco had affirmative counterclaims against NXIVM and Nancy Salzman for consumer fraud. We felt that the tapes, the firm felt that the tapes would demonstrate that many of the representations that were made to Ms. Franco prior to her attending were false or misleading.

The other reason was one of the DVDs was demarcated Forbes. One of the issues in our case was a Forbes article written in 2003 that was part of NXIVM's case against Ms. Franco. We wanted that DVD.

And the other reason was there were certain things that Ms. Franco claimed were said to her at the intensives when she was attending that we thought were helpful to our case including, you know, mention of not paying taxes or other issues that startled Ms. Franco that we wanted to see on the video. And they did have, at least they had identified, DVDs of when she was attending. So, we wanted those.