1 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK - - - - - - - - - - - - - - -X UNITED STATES OF AMERICA, : 18-CR-204(NGG) : : : -against: United States Courthouse : Brooklyn, New York : : : LAUREN SALZMAN, : Monday, March 25, 2019 : 4:00 p.m. Defendant. : : : : - - - - - - - - - - - - - - -X TRANSCRIPT OF CRIMINAL CAUSE FOR GUILTY PLEA BEFORE THE HONORABLE NICHOLAS G. GARAUFIS UNITED STATES SENIOR DISTRICT JUDGE A P P E A R A N C E S: For the Government: RICHARD P. DONOGHUE, ESQ. United States Attorney Eastern District of New York 271 Cadman Plaza East Brooklyn, New York 11201 BY: MOIRA KIM PENZA, ESQ. TANYA HAJJAR, ESQ. Assistant United States Attorneys For the Defendant: QUARLES & BRADY, LLP Attorneys for the Defendant Lauren Salzman Two North Central Avenue Phoenix, Arizona 85004 BY: HECTOR DIAZ, ESQ. ANDREA S. TAZIOLI, ESQ. Anthony D. Frisolone, FAPR, RDR, CRR, CRI, CSR Official Court Reporter 2 Court Reporter: Anthony D. Frisolone, FAPR, RDR, CRR, CRI Official Court Reporter Telephone: (718) 613-2487 Facsimile: (718) 613-2694 E-mail: Anthony_Frisolone@nyed.uscourts.gov Proceedings recorded by computerized stenography. produced by Computer-aided Transcription. Transcript Anthony D. Frisolone, FAPR, RDR, CRR, CRI, CSR Official Court Reporter Guilty Plea 3 1 (In open court.) 2 (Defendant present in open court.) 3 COURTROOM DEPUTY: All rise. The United States 4 District Court for the Eastern District of New York is now in 5 session. The Honorable Nicholas G. Garaufis is now presiding. 6 (Honorable Nicholas G. Garaufis takes the bench.) 7 COURTROOM DEPUTY: Calling criminal cause for guilty 8 plea in Docket No. 18-CR-204, United States of America against 9 Lauren Salzman. 10 11 Counsel, please note your appearances for the record. 12 MS. PENZA: For the United States of America, 13 Assistant United States Attorney Moira Kim Penza and Tanya 14 Hajjar. 15 Good morning, your Honor. 16 MR. DIAZ: Hector Diaz for Lauren Salzman. 17 Good morning, your Honor. 18 THE COURT: Before we start with this, let me advise 19 the Government that the Court has filed on ECF a decision 20 regarding holding a suppression hearing. 21 issue with regard to counsel for Ms. Bronfman. 22 have a status conference Wednesday. We also have an We have to 23 MS. PENZA: Yes, your Honor. 24 THE COURT: In connection with Ms. Bronfman, please 25 contact Ms. Bronfman's counsel so that we can set this all up. Anthony D. Frisolone, FAPR, RDR, CRR, CRI, CSR Official Court Reporter Guilty Plea 1 4 We don't have time to waste here. 2 MS. PENZA: We understand, your Honor. 3 THE COURT: Okay. 4 MR. DIAZ: 6 THE COURT: 7 MS. HAJJAR: Good afternoon, your Honor. Appearances, please. Tanya Hajjar and Moira Kim Penza for the Government. 9 10 The reason we're all here today -- 5 8 Sorry to interrupt. MR. DIAZ: Hector Diaz and Andrea Tazioli for Ms. Salzman. 11 THE COURT: Mr. Diaz, I understand that your client 12 wishes to withdraw her previously entered pleas to Counts One 13 and Two of the indictment in which she is charged, and to 14 enter a plea of guilty pursuant to an agreement; is that 15 right? 16 MR. DIAZ: That's correct, your Honor. 17 THE COURT: Ms. Salzman, I understand from your 18 attorney that you wish to plead guilty to Counts One and Two 19 of the indictment of the superseding indictment (S-2) in 20 18-CR-204 which you are charged. 21 This is a serious decision and I must be certain 22 that you make it with a full understanding of your rights and 23 the consequences of your plea. 24 rights to you and then ask you questions. 25 to be under oath. I am going to explain certain I want your answers The deputy clerk will swear you in. Anthony D. Frisolone, FAPR, RDR, CRR, CRI, CSR Official Court Reporter Guilty Plea 5 1 COURTROOM DEPUTY: Raise your right hand, please. 2 (Defendant sworn.) 3 THE DEFENDANT: 4 COURTROOM DEPUTY: Thank you. 5 THE COURT: Thank you. 6 Now, Ms. Salzman, you understand that having been I do. Okay. 7 sworn to tell the truth you must do so. 8 deliberately lie in response to any question I ask you, you 9 could face further criminal charges for perjury. 10 Do you understand that? 11 THE DEFENDANT: 12 THE COURT: If you were to Yes, I do, your Honor. Okay. If I say anything that you do not 13 understand, or if you need me to repeat anything, just ask. 14 It is important that you understand everything that goes on 15 into these proceedings. 16 Is that clear? 17 THE DEFENDANT: 18 THE COURT: 19 THE DEFENDANT: 20 THE COURT: 21 THE DEFENDANT: 22 THE COURT: 23 THE DEFENDANT: 24 THE COURT: 25 Yes. Okay. Ms. Salzman, how old are you? 42. How far did you go in school? I have a Bachelor of Arts Degree. Where did you go to school? SUNY Oswego. Okay. And what country are you a citizen? Anthony D. Frisolone, FAPR, RDR, CRR, CRI, CSR Official Court Reporter Guilty Plea 1 THE DEFENDANT: 2 THE COURT: 3 THE DEFENDANT: 4 THE COURT: 5 6 The United States. And is English your primary language? It is, yes. Mr. Diaz, have you had any difficulty communicating with your client in English? 6 MR. DIAZ: 7 THE COURT: None, your Honor. All right. Ms. Salzman, I must be 8 certain that whatever decision you make today you make with a 9 clear head, so I'm going to ask you some questions about your 10 health. 11 12 Are you currently, or have you recently been, under the care of a doctor or psychiatrist for any reason? 13 THE DEFENDANT: 14 THE COURT: 15 In the past 24 hours, have you taken any pills or drugs or medicine of any kind? 16 THE DEFENDANT: 17 THE COURT: 18 alcoholic beverages? 19 20 I had one glass of wine almost 24 hours ago. THE COURT: Have you ever been hospitalized or treated for any drug-related problem? 23 THE DEFENDANT: 24 THE COURT: 25 I have not. In the past 24 hours, have you drunk any THE DEFENDANT: 21 22 No, sir. I have not. Is your mind clear as you stand here today? Anthony D. Frisolone, FAPR, RDR, CRR, CRI, CSR Official Court Reporter Guilty Plea 1 THE DEFENDANT: 2 THE COURT: 3 Yes, it is. And do you understand everything being said to you? 4 THE DEFENDANT: 5 THE COURT: 6 Mr. Diaz, have you discussed the question of a Yes, I do. All right. 7 guilty plea with your client? 8 MR. DIAZ: 9 THE COURT: 10 We have, your Honor. All right. In your view, does she understand the rights she would be waiving by pleading guilty? 11 MR. DIAZ: 12 THE COURT: 13 She absolutely does, your Honor. Do you have any question as to your client's competency to proceed? 14 MR. DIAZ: I have none. 15 THE COURT: All right. 16 Ms. Salzman, you have a right to be represented by 17 counsel at trial and at every other stage of the proceedings 18 in this case. 19 Do you understand? 20 THE DEFENDANT: 21 THE COURT: 22 7 Yes, I do. If at any time in the future it becomes necessary to do so, the Court will appoint counsel for you. 23 Do you understand that? 24 THE DEFENDANT: 25 THE COURT: Yes, I do. Ms. Salzman, are you are satisfied with Anthony D. Frisolone, FAPR, RDR, CRR, CRI, CSR Official Court Reporter Guilty Plea 8 1 the assistance your attorneys have you given you thus far in 2 this matter? 3 THE DEFENDANT: 4 THE COURT: 5 Yes, I am. Do you feel you need any more time to discuss with them the question of a guilty plea? 6 THE DEFENDANT: 7 THE COURT: No thank you. Okay. Now, you are pleading guilty to 8 Counts One and Two of the indictment, superseding indictment 9 (S-2), in 18-CR-204. 10 Count One charges you with a racketeering conspiracy 11 and Count Two charges you with racketeering. 12 to do is I'm going to ask the Government to set forth the 13 charge in Count One as it relates to this defendant and to 14 provide the defendant with the elements of the crime that the 15 Government would have to prove to a jury beyond a reasonable 16 doubt and unanimously in order to convict her if she decided 17 to go to trial. 18 What I'm going So why don't we hear from the Government on that. 19 Please listen carefully, ma'am. 20 MS. HAJJAR: 21 For Counts One and Two, that's racketeering 22 conspiracy and racketeering, the Government would prove as set 23 forth in the second superseding indictment that in or about 24 and between 2003 and March 2018, in the Eastern District of 25 New York and elsewhere: Yes, your Honor. Anthony D. Frisolone, FAPR, RDR, CRR, CRI, CSR Official Court Reporter Guilty Plea 1 First, that an enterprise existed. 9 And for this 2 element, the Government would prove that the enterprise was a 3 group of individuals associated-in-fact and was an ongoing 4 organization that operated in the Eastern District of New York 5 and elsewhere. 6 for the common purpose of achieving the objectives of the 7 enterprise which included obtaining financial and personal 8 benefits from members of the enterprise by promoting Keith 9 Ranieri and recruiting others into pyramid organizations he 10 11 Whose members functioned as a continuing unit created as alleged in the second superseding indictment. The second element is that the enterprise or its 12 activities affected interstate or foreign commerce. 13 the Government would prove that the enterprise engaged in 14 various types of conduct that affected enterprise and foreign 15 commerce including offering classes to individuals in 16 Brooklyn, Queens, other states and outside the United States 17 that promoted Ranieri's teachings and recruiting individuals 18 who traveled in interstate commerce to reach Albany, New York 19 including through JFK International Airport in Queens as 20 described in the second superseding indictment. 21 And here, Third, that the defendant was associated with or 22 employed by that enterprise. 23 Government would prove the defendant was a member of the 24 charged enterprise. 25 And for this element, the And finally, that the defendant agreed to Anthony D. Frisolone, FAPR, RDR, CRR, CRI, CSR Official Court Reporter Guilty Plea 10 1 participate, and did participate, in the enterprise through a 2 pattern of racketeering activity with the knowledge and intent 3 that she and other co-conspirators would commit at least two 4 predicate acts in furtherance of the enterprise. 5 Among other things, the defendant agreed to commit 6 and committed Racketeering Acts 9, Racketeering 10, and 13 of 7 the second superseding indictment which we anticipate the 8 defendant will allocute to today. 9 In addition, to the elements that I have already set 10 forth, the Government would prove the elements in each of 11 those racketeering acts. 12 With respect to Racketeering Act 9, trafficking in 13 document servitude of Jane Doe 4. 14 that in or about and between March 2010 and April 2012, in the 15 Northern District of New York and elsewhere, the defendant did 16 knowingly recruit, harbor, transport, provide, or obtain a 17 person for labor and services and aid and abet the same; and 18 that such labor and services were to be obtained in violation 19 of 18 U.S.C. 1589 and 18 U.S.C. 1592. 20 document servitude. 21 The Government would prove That's forced labor and Here, the Government will prove the defendant 22 knowingly participated in a scheme to confine Jane Doe 4 to a 23 room in order for, among other reasons, to require her to 24 perform labor and services including book reports and various 25 writings for Keith Ranieri knowing that Jane Doe 4 was Anthony D. Frisolone, FAPR, RDR, CRR, CRI, CSR Official Court Reporter Guilty Plea 1 instructed that if she left the room she would be taken to 2 Mexico without her consent. 3 11 With respect to Racketeering Act 10, state law 4 extortion, the Government would prove that in or about and 5 between January 2016 and June 2017, in the Northern District 6 of New York and elsewhere, the defendant compelled and induced 7 Jane Does 6 and 10 to deliver personal property by instilling 8 in them a fear that if the property were not so delivered, one 9 or more persons would expose secret or publicize an asserted 10 fact whether true or false tending to subject some person to 11 hatred, contempt, or ridicule and perform an act which would 12 not in itself materially benefit the defendant but which was 13 calculated to harm other persons materially with respect to 14 their health, safety, business, calling, career, financial 15 condition, reputation, and personal relationships. 16 And here, the Government would prove the defendant 17 obtained property, include sexually explicit photographs and 18 videos, credit card authorizations, and rights to assets from 19 her lower-ranked DOS slaves including Jane Does 6 and 11. 20 Having instilled in them the fear that if they did not, she 21 and others would release their collateral thereby exposing 22 secrets about themselves and loved ones whether true or false 23 tending to subject them to hatred, contempt, or ridicule or 24 harm them materially with respect to, among other things, 25 their reputation and personal relationships. Anthony D. Frisolone, FAPR, RDR, CRR, CRI, CSR Official Court Reporter Guilty Plea 1 12 With respect to Racketeering Act 13, the Government 2 would prove that in or about and between January 2016 and June 3 2017, in the Northern District of New York and elsewhere, the 4 defendant provided or obtained the labor and services of Jane 5 Doe 6 and 11 by means of serious harm or threats of serious 6 harm to those persons or other persons by means of any scheme, 7 plan, or pattern intended to cause Jane Does 6 and 11 to 8 believe that if they did not perform such labor and services, 9 they would suffer serious harm. 10 And here, the Government would prove the defendant 11 required those lower-ranking DOS slaves including Jane Does 6 12 and 11 to perform labor and services including tasks that 13 would otherwise be compensable under theft serious harm 14 including the release of their collateral. 15 And lastly, the Government would prove that in or 16 about and between January 2016 and June 2017, within the 17 Eastern District of New York and elsewhere, that there was a 18 scheme or artifice to defraud and to obtain money and property 19 from lower-ranking DOS members by materially false and 20 fraudulent pretenses, representations, and promises; that the 21 defendant knowingly and willfully participated in the scheme 22 or artifice to defraud with knowledge of its fraudulent nature 23 and with specific intent to defraud. 24 execution of the scheme, the defendant used or caused to be 25 used the interstate wires, or caused the use of the interstate And that in the Anthony D. Frisolone, FAPR, RDR, CRR, CRI, CSR Official Court Reporter Guilty Plea 1 13 wires. 2 And here, the Government would prove the defendant 3 received property and other things of value from lower-ranking 4 DOS members by falsely representing that DOS was an 5 organization comprised of women and by deliberately concealing 6 Keith Ranieri's role in DOS and that the scheme involved the 7 sending of electronic messages. 8 9 THE COURT: So, Ms. Salzman, do you understand the charges in Counts One and Two of the racketeering conspiracy 10 in Count One and racketeering in Count Two as they apply to 11 you in this indictment? 12 THE DEFENDANT: 13 THE COURT: Yes, I do. Okay. And do you understand the 14 elements of the crimes that the Government would have to prove 15 to a jury beyond a reasonable doubt and unanimously if you 16 decided to go to trial in order to convict you of these 17 crimes? 18 THE DEFENDANT: 19 THE COURT: 20 MR. DIAZ: 21 THE COURT: Yes, I do. Okay. Anything else? No, your Honor. So, at this point, I'm going to go over 22 your rights. 23 rights with you, but I'm going to go over them as well. 24 You have a right to plead not guilty to these 25 charges. I'm sure that your attorneys have gone over your No one can be forced to plead guilty. Anthony D. Frisolone, FAPR, RDR, CRR, CRI, CSR Official Court Reporter Guilty Plea 1 Do you understand that? 2 THE DEFENDANT: 3 THE COURT: 14 Yes, I do. If you do plead not guilty to these 4 charges, or persist in your plea of not guilty, you have a 5 right under the constitution and laws of the United States to 6 a speedy and public trial before a jury with the assistance of 7 your attorneys. 8 Do you understand that? 9 THE DEFENDANT: 10 THE COURT: Yes, I do. At any trial, you would be presumed to 11 be innocent. You would not have to prove that you were 12 innocent. 13 Government that must come forward with proof that establishes 14 beyond a reasonable doubt that you were guilty of the crimes 15 charged. 16 proof, the jury would have a duty to find you not guilty. This is because under our system law, it is the If the Government failed to meet this burden of 17 Do you understand that? 18 THE DEFENDANT: 19 THE COURT: Yes, I do. In the course of a trial, witnesses for 20 the Government would have to come here to court and testify in 21 your presence. 22 cross-examine these witnesses. 23 objections to evidence the Government sought to offer against 24 you. 25 witnesses to come to court and testify if you or your Your attorneys would have the right to They could raise legal They could offer evidence on your behalf and compel Anthony D. Frisolone, FAPR, RDR, CRR, CRI, CSR Official Court Reporter Guilty Plea 15 1 attorneys thought there was evidence that might help you in 2 this case. 3 Do you understand that? 4 THE DEFENDANT: 5 THE COURT: Yes, I do. At a trial, you would have the right to 6 testify in your own behalf if you wished to do so. On the 7 other hand, you could not be forced to be a witness at your 8 trial. 9 United States, no person can be compelled to be a witness This is because under the constitution and laws of the 10 against yourself. If you wish to go to trial, or chose not to 11 testify, I would instruct the jury that they could not hold 12 that against you. 13 Do you understand that? 14 THE DEFENDANT: 15 THE COURT: Yes, I do. If instead of going to trial you plead 16 guilty to the crimes charged, and if I accept your pleas of 17 guilty, you will be giving up your right to a trial and all 18 the other rights I've just discussed. 19 in this case as far as you are concerned. 20 appeal on the question of whether you did or did not commit 21 these crimes. 22 thought I did not properly follow the law in sentencing you. 23 Otherwise, I will simply enter a judgment of guilty based on 24 your plea of guilty. 25 There will be no trial There will be no The only reason that you could appeal if you Do you understand that? Anthony D. Frisolone, FAPR, RDR, CRR, CRI, CSR Official Court Reporter Guilty Plea 1 THE DEFENDANT: 2 THE COURT: 16 Yes, I do. If you do plead guilty, I would have to 3 ask you questions about what you did in order to satisfy 4 myself that you were guilty of these charges. 5 answer my questions and acknowledge your guilty and if you do 6 this, you will be giving up your right not to incriminate 7 yourself. 8 Do you understand that? 9 THE DEFENDANT: 10 THE COURT: You'll have to Yes, I do. Okay. Ms. Salzman, are you willing to 11 give up your right to a trial and all the other rights that 12 I've just discussed with you? 13 THE DEFENDANT: 14 THE COURT: 15 Yes, your Honor, I am. Okay. Now, I have in front of me a agreement in the United States District Court 16 Eastern District of New York. 17 America against Lauren Salzman, 18-CR-204 (S-2). 18 as Court Exhibit Number 1 dated today March 25, 2019. 19 agreement consists of ten pages plus a one-page Exhibit A 20 attached to it. 21 The case of United States of It is marked The And I just want you to initial when I give this to 22 initial as everyone should initial Exhibit A as well, all 23 right? 24 some questions. 25 But I'm going to hand this document to you and ask you Just initial the exhibit. THE DEFENDANT: (Initialing). Anthony D. Frisolone, FAPR, RDR, CRR, CRI, CSR Official Court Reporter Guilty Plea 1 THE COURT: 2 Ms. Salzman, have you read this agreement? 3 THE DEFENDANT: 4 THE COURT: 5 At the bottom. attorneys? THE DEFENDANT: 7 THE COURT: 9 10 Yes, I have. Have you discussed it with your 6 8 Yes. Have they answered any and all questions that you had about it? THE DEFENDANT: THE COURT: Yes, they have. Do you understand your rights and your 11 obligations under this agreement? 12 THE DEFENDANT: 13 THE COURT: 14 I believe I do, yes. Okay. Turn to Page 10 which is the last page of the agreement. 15 Now, is that your signature by your name. 16 THE DEFENDANT: 17 THE COURT: 18 THE DEFENDANT: 19 THE COURT: 20 MR. DIAZ: 21 THE COURT: 22 MS. HAJJAR: 23 THE COURT: 24 I have an important question for you, ma'am. 25 17 Yes, it is. (Signing) it today? Yes, I did. Counsel has also executed the agreement? I have, your Honor. And as has the Government? Yes, your Honor. Please return the agreement to me. Is there any other promise that's been made to you to get you to Anthony D. Frisolone, FAPR, RDR, CRR, CRI, CSR Official Court Reporter Guilty Plea 1 18 plead guilty that is not contained in this agreement? 2 THE DEFENDANT: 3 THE COURT: No, sir. I'm going to go over the statutory 4 penalties associated with pleading guilty to Counts One and 5 Two, racketeering conspiracy and racketeering. 6 set forth in Paragraph 1 on Page 2 of the agreement. 7 term of imprisonment is 20 years. 8 imprisonment. 9 And they're Maximum There is no minimum term of The maximum supervised release term is three years 10 which would follow any term of imprisonment. 11 of release is violated, you could be sentenced to up to two 12 years in jail without credit for the time you previously 13 served in jail or the time you previously served on supervised 14 release. 15 16 The maximum fine is the greater of $250,000 or twice the gross profits or other proceedings of the enterprise. 17 18 Restitution is mandatory in the full amount of each victim's losses as determined by the Court. 19 20 If a condition There is a $100 special assessment for each of the two counts which is a total of $200. 21 And you're also subject to criminal forfeiture as 22 set forth elsewhere in the agreement in Paragraphs 8 through 23 13. 24 25 In addition, the sentence imposed on each count may run consecutively, that is, one after the other. Anthony D. Frisolone, FAPR, RDR, CRR, CRI, CSR Official Court Reporter Guilty Plea 1 2 So do you understand the statutory penalties associated with pleading guilty to these two crimes? 3 THE DEFENDANT: 4 THE COURT: 5 MR. DIAZ: 7 THE COURT: 9 10 11 Okay. And, in your view, does your client understand how sentencing would work in her case basically? MR. DIAZ: THE COURT: Basically, your Honor, she does. Okay. Ms. Salzman, have you had a discussion with your attorneys about sentencing? THE DEFENDANT: 13 THE COURT: Yes, I have. Are you satisfied that you have a basic understanding about how sentencing would work in your case? 15 THE DEFENDANT: 16 THE COURT: 17 Mr. Diaz, have you discussed the I have, your Honor. 12 14 Yes, I do. sentencing process with your client? 6 8 19 Yes, I am. Well, I'm going to discuss it with you as well as I'm required to. 18 THE DEFENDANT: 19 THE COURT: Thank you. In sentencing you, I'm required to take 20 into consideration a number of things about you and about the 21 crimes to which you are pleading guilty. 22 Oh, by the way, if at any time I discuss this with 23 you, you wish to stop and talk to your attorneys about 24 something you might not understand that I'm telling you, just 25 let me know. Anthony D. Frisolone, FAPR, RDR, CRR, CRI, CSR Official Court Reporter Guilty Plea 20 1 THE DEFENDANT: 2 THE COURT: 3 So when I do that, I will be directed to a guideline Great. Thank you. We have plenty of time here. 4 that will provide a sentencing range. 5 sentence you within the range provided by the guideline, but I 6 am required to carefully consider the guideline 7 recommendation, among other things, in deciding what would 8 constitute a reasonable sentence in your case. 9 I'm not required to It is my experience that a sentence within the 10 guideline range is often reasonable and appropriate but this 11 is not always the case. 12 sentence for your case, I will consider possible departures 13 from that range under the sentencing guidelines as well as 14 other statutory sentencing factors. 15 to impose a sentence that is more lenient or more severe than 16 the one recommended by the guidelines. 17 explain the reasons for the sentence that I have selected. In determining an appropriate 18 Do you understand that? 19 THE DEFENDANT: 20 THE COURT: 21 I may ultimately decide If I do so, I will Yes, I do. It is important to understand that no one knows today what your exact guidelines range will be. 22 23 24 25 Anthony D. Frisolone, FAPR, RDR, CRR, CRI, CSR Official Court Reporter Guilty Plea 21 1 2 3 4 5 6 7 THE COURT: Okay. Before I impose sentence, I will 8 receive a report prepared by the probation department which 9 will calculate a particular guideline range. You and your 10 attorneys will have the opportunity to see that report. 11 you think it is mistaken or incomplete in any way, you'll have 12 the opportunity to bring that to my attention. 13 understand that no one can make a promise to you as to the 14 sentence I will impose. 15 If You must Your attorneys or the prosecutor may have made 16 predictions to you and may make recommendations to the Court 17 concerning the sentence I should impose and I will listen 18 carefully to whatever they say. 19 understand that the final responsibility for sentencing you is 20 mine alone. 21 attorneys, I may also view this case differently. 22 But you must clearly While I might view this case identically to the If so, I may not impose sentence they have predicted 23 or recommended. Even if I sentence you differently from what 24 the attorneys or anyone else has estimate order predicted, you 25 would still be bound by your guilty pleas and you will not be Anthony D. Frisolone, FAPR, RDR, CRR, CRI, CSR Official Court Reporter Guilty Plea 1 22 allowed to withdraw them. 2 Do you understand? 3 THE DEFENDANT: 4 THE COURT: Yes, your Honor. If after I impose sentence, you or your 5 attorneys think I have not properly the followed the law in 6 essential you, you can appeal your sentence to the 7 United States Court of Appeals for the Second Circuit. 8 Do you understand that? 9 THE DEFENDANT: 10 11 THE COURT: Yes, your Honor. Okay. Anything else on sentencing from the Government? 12 MS. HAJJAR: No, your Honor. 13 THE COURT: From the defense? 14 MR. DIAZ: 15 THE COURT: Thank you. No, your Honor. Okay. Do you have any questions you 16 would like to ask me with the charges, your rights, or 17 anything else related to this matter that might not be clear? 18 THE DEFENDANT: 19 THE COURT: No thank you. Mr. Diaz, is there anything you would 20 like me to discuss with your client in further detail before I 21 proceed to formal allocution? 22 MR. DIAZ: 23 THE COURT: 24 25 None, your Honor. Do you know of any reason why your client should not enter a plea of guilty to these two charges? MR. DIAZ: I do not. Anthony D. Frisolone, FAPR, RDR, CRR, CRI, CSR Official Court Reporter Guilty Plea 1 2 THE COURT: Are you aware any viable legal defense to the charges? 3 MR. DIAZ: 4 THE COURT: 5 23 I am not, your Honor. Okay. Ms. Salzman, are you ready to plead? 6 THE DEFENDANT: 7 THE COURT: I am. How do you plead to the charge contained 8 in Count One of the superseding indictment (S-2) charging with 9 you racketeering procedure guilty or not guilty? 10 THE DEFENDANT: 11 THE COURT: I plead guilty. How do you plead to the charge contained 12 as Count Two of the superseding indictment charging you with 13 racketeering, guilty or not guilty? 14 THE DEFENDANT: 15 THE COURT: 16 I plead guilty. Are you pleading guilty voluntarily and of your own free will? 17 THE DEFENDANT: 18 THE COURT: 19 to you plead guilty? Yes, your Honor I am. Had gone anyone threatened or forced you 20 THE DEFENDANT: 21 THE COURT: No, sir. Other than the agreement with the 22 Government, has anyone made you a promise that caused you to 23 plead guilty? 24 THE DEFENDANT: 25 THE COURT: No, sir. Has anyone made you a promise about the Anthony D. Frisolone, FAPR, RDR, CRR, CRI, CSR Official Court Reporter Guilty Plea 1 24 sentence that you will receive? 2 THE DEFENDANT: 3 THE COURT: No. So, at this time, I would like you to 4 tell me in your own words what you did to commit these crimes. 5 If you're reading from a prepared statement, please do so 6 slowly. 7 8 I take it the statement is the statement that you prepared in consultation with your attorneys; correct? 9 THE DEFENDANT: Yes, correct. 10 THE COURT: Okay. So just read slowly so that we 11 can get it all down. 12 questions, or if the Government asks that I ask you additional 13 questions, we can do so at the end of your prepared 14 conclusion. And if the Court has any additional 15 MR. DIAZ: Your Honor, if I might? 16 Just in terms of her statement, we're also 17 stipulating to the Government's statement in terms of the 18 enterprise. 19 think we stipulated to the statement that was put on the 20 record. Her allocution is going to touch on it, but I 21 THE COURT: 22 MR. DIAZ: 23 24 25 The existence of the enterprise -The existence of the enterprise yes, your Honor. THE COURT: -- in which she was a member and participant? Anthony D. Frisolone, FAPR, RDR, CRR, CRI, CSR Official Court Reporter Guilty Plea 1 MR. DIAZ: 2 THE COURT: 3 MS. HAJJAR: 4 THE COURT: 5 25 Correct. Is that satisfactory? Yes, your Honor. Okay. All right. I'm accepting that as part of -- is that right, ma'am? 6 THE DEFENDANT: 7 THE COURT: 8 So I'm accepting that portion of your allocution 9 Yes, correct. You have to say yes. based upon the description of the enterprise and your 10 involvement in the enterprise as a member and participant. 11 that part of your allocution is taken care of so let's move on 12 to the specifics all right. 13 Go ahead. 14 THE DEFENDANT: So Slowly. I am pleading guilty today after a 15 careful and thorough review of the criminal allegations 16 against me. 17 that I committed acts which I knew or should have known were 18 absolutely wrong. 19 The conclusion of this review was acknowledging Over the years, through my association with Nexium, 20 I formed many relationships with members of this organization. 21 Through these associations, I truly believed that I was 22 helping to empower people to live their left lives. 23 However, I and others engaged in criminal conduct, 24 which I blindly followed and rationalized as furthering the 25 underlying principles in which Nexium was formed. This Anthony D. Frisolone, FAPR, RDR, CRR, CRI, CSR Official Court Reporter Guilty Plea 26 1 rationalization led to my agreement to associate with an 2 enterprise of individuals as alleged in the second superseding 3 indictment. 4 The common purpose of the enterprise included 5 obtaining financial and personal benefits for its members for 6 members of the enterprise including myself by furthering and 7 promoting the objectives of Keith Ranieri and recruiting 8 others into organizations created by Keith Ranieri. 9 Between 1999 and 2017, I was aware of and 10 participated in some of the criminal objectives of the 11 enterprise and I conspired and agreed that others who were 12 also part of our conspiracy would commit at least two acts of 13 racketeering in furtherance of this enterprise. 14 Between 1999 and 2017, I also knowingly and 15 intentionally conducted and participated directly and 16 indirectly in the conduct of the enterprise through a pattern 17 of racketeering acts which affect interstate and foreign 18 commerce. 19 Specifically, I committed the following acts. 20 On or about March 2010 through April 2012, I 21 knowingly and intentionally harbored Jane Doe 4, a woman whose 22 identity is known to me, in a room in the home in the Northern 23 District of New York and threatened to deport Jane Doe 4 back 24 to Mexico if she did not complete labor requested by myself 25 and others. Anthony D. Frisolone, FAPR, RDR, CRR, CRI, CSR Official Court Reporter Guilty Plea 1 27 On or about January 2017 through June 2017, within 2 the Northern District of New York and elsewhere, I was a 3 member of a secret organization developed by Nexium members 4 that has been identified in the indictment as DOS. 5 Pursuant to my association in DOS, I knowingly and 6 intentionally took and withheld property from Jane Doe 6 and 7 Jane Doe 11, two women who are known to me and who were 8 enrolled as lower-ranking DOS members. 9 This property was referred to by members in DOS as 10 "collateral" which consisted of material or information that 11 belonged to these lower-ranking DOS members and which such 12 lower-ranking DOS members would not want revealed because it 13 could be personally damaging or ruinous. 14 I induced Jane Doe 6 and Jane Doe 11 to deliver this 15 collateral to me by instilling them a fear that if the 16 property was not delivered, I could expose this collateral 17 which could have been embarrassing and personally damaging to 18 themselves or others if released. 19 From January 2017 to June 2017, within the Northern 20 District of New York and elsewhere, I knowingly and 21 intentionally obtained the labor and services in the form of 22 acts of care from Jane Doe 6 and Jane Doe 11 who were 23 lower-ranking DOS members. 24 25 Acts of care included having these women perform services for me that would have otherwise been compensable. Anthony D. Frisolone, FAPR, RDR, CRR, CRI, CSR Official Court Reporter I Guilty Plea 28 1 obtained these labor and services from Jane Doe 6 and Jane Doe 2 11 by causing them to believe that if they did not perform 3 requested acts of care, then they could suffer serious harm. 4 The serious harm in this case would be the threat of the 5 release of their collateral. 6 From January 2017 to June 2017, within the Eastern 7 District of New York and elsewhere, I knowingly and 8 intentionally worked with others and devised a scheme to make 9 materially false representations and omissions regarding DOS 10 in order to obtain property from lower-ranking DOS members. 11 Specifically, I concealed Keith Ranieri's role as the head of 12 DOS and characterized DOS as a women's organization knowing 13 that Keith Ranieri was the head of this organization. 14 The property obtained which was considered 15 collateral included credit card authorizations, sexually 16 explicit photos and videos, and rights to assets and property. 17 Such property was transmitted in interstate and foreign 18 commerce via e-mail, telephone, text messages and telegram. 19 Your Honor, in light of reviewing all the discovery 20 and having many months to reflect, I came to the conclusion 21 that the most moral and the most just course of action for me 22 was to take full responsibility for my conduct and that is why 23 I am plead guilty today and I'm very sorry far my poor 24 decision-making and decisions that result in the harm to 25 others and not the just victims in this case but to hundreds Anthony D. Frisolone, FAPR, RDR, CRR, CRI, CSR Official Court Reporter Guilty Plea 29 1 of members of our community and their friends and families as 2 well. 3 4 THE COURT: Thank you very much. questions for the defendant? 5 MS. HAJJAR: 6 THE COURT: Anything else? 7 MR. DIAZ: No, your Honor. 8 THE COURT: 9 Are there other acting voluntarily. No, your Honor. All right. Thank you. Thank you. Ms. Salzman, I find you were That you fully understand rights and 10 consequences of your pleas. 11 basis for your pleas. 12 guilty to Counts One and Two of the second superseding 13 indictment. 14 There is, moreover, a factual I, therefore, accept your pleas of I'm going to set a sentencing date for Wednesday, 15 September 11, 2019, at 11:00 a.m. You're going to be contacted 16 by a probation officer eventually for a presentence interview. 17 Your attorneys will want to be present for that interview. 18 The purpose of this interview is for the probation officer to 19 prepare a presentence investigation report of which we'll 20 memorialize your background, your education, your family 21 background, your health, and other details that the Court will 22 want to know about at the time of your sentencing. 23 assist the probation officer with the information. 24 25 And please In addition, once you have the presentence report, you and your attorneys will have the opportunity to review it. Anthony D. Frisolone, FAPR, RDR, CRR, CRI, CSR Official Court Reporter Guilty Plea 30 1 If there's anything in the report that's erroneous, or if 2 there is anything about you that I should know about that 3 isn't found in the report, your attorneys will provide that 4 information and any corrections will provide that in writing 5 to the probation officer to the Government and to the Court. 6 When you come to court, I will have read all the 7 materials. Your attorneys will have an opportunity to make a 8 submission. The Government will have an opportunity to make a 9 submission. And then, at the sentencing, you will have the 10 opportunity along with your attorneys and the Government to 11 speak to the Court. 12 If, for any reason, you remember something at the 13 last minute that you think would be important for me to know 14 at sentencing please tell your attorneys first before you tell 15 me. 16 All right? 17 THE DEFENDANT: 18 THE COURT: 19 Thank you. And I'm going to give the agreement to the Government and request a photostatic copy for the Court. 20 MS. HAJJAR: 21 THE COURT: Yes, your Honor. And now it may be that the sentencing 22 will not take place at exactly that time, but I need to set 23 down a marker so we know that we have a date and that we may 24 decide after you consult with both sides that the date should 25 be changed. You'll let me know about that as well, okay? Anthony D. Frisolone, FAPR, RDR, CRR, CRI, CSR Official Court Reporter Guilty Plea 1 2 Is there anything else from the Government for today? 3 MS. HAJJAR: 4 THE COURT: 5 MR. DIAZ: 6 MS. TAZIOLI: 7 Not from the Government. From the defense? Not from the defense. THE COURT: 9 MS. TAZIOLI: THE COURT: 12 MR. DIAZ: 13 THE COURT: 15 16 17 Sure. You may move. I am moving, yes. Are you moving? Thank you, your Honor. 11 14 Your Honor, we move to seal the proceedings today. 8 10 31 All right. Motion is granted. There was something else, I apologize. I'm just wondering if there was anything else because. MS. HAJJAR: Your Honor, we'll provide the Court -- we can provide a redacted copy of today's transcript. THE COURT: If you're required to provide the 18 transcript in connection with the discovery rights of anyone 19 else involved in this case, you're at liberty to do so. 20 MS. HAJJAR: 21 THE COURT: 22 Notwithstanding that I've sealed the transcript. 23 MS. HAJJAR: 24 THE COURT: 25 Thank you, your Honor. Thank you, your Honor. All right. place in open court as you know. But this proceeding took So I just want you to Anthony D. Frisolone, FAPR, RDR, CRR, CRI, CSR Official Court Reporter Guilty Plea 32 1 understand that it took place in open court. 2 the courtroom for there unless there was a motion made and we 3 conducted an entire proceeding under the appropriate 4 Second Circuit precedent. 5 MS. HAJJAR: 6 THE COURT: 7 Okay. We understand. Good to know. All right. Anything more? 8 9 Yes, your Honor. I couldn't close MS. PENZA: for Wednesday. We just wanted to clarify, your Honor, Did you want us to just set a time, find times 10 with Ms. Bronfman's counsel, and I wanted to clarify if you 11 wanted us to include her Curcio counsel. 12 THE COURT: I want everybody. 13 MS. PENZA: Donna Newman. 14 THE COURT: If she's available. 15 Curcio counsel is -- I think we may need Curcio counsel. 16 MS. PENZA: I think we may. 17 THE COURT: But the mission is that you need to talk 18 to everybody and come up with a time when everyone can be 19 there. 20 21 MS. PENZA: Just to clarify as to Ms. Bronfman or all parties? 22 THE COURT: Ms. Bronfman, her attorneys, her Curcio 24 MS. PENZA: Yes. 25 THE COURT: And you. 23 counsel. Anthony D. Frisolone, FAPR, RDR, CRR, CRI, CSR Official Court Reporter Guilty Plea 1 MS. PENZA: Yes, your Honor. 2 THE COURT: All right. 3 Sorry to impose on the discussion here. 4 MS. PENZA: Thank you, your Honor. 5 THE COURT: Things come up. 6 MR. DIAZ: 7 MS. TAZIOLI: 8 THE COURT: 9 10 Thank you. Thank you. Thank you everyone see you in September. Thank you. (WHEREUPON, this matter was adjourned.) 11 12 * * * 13 14 CERTIFICATE OF REPORTER 15 16 I certify that the foregoing is a correct transcript of the record of proceedings in the above-entitled matter. 17 18 19 20 21 22 33 ________________________________________ Anthony D. Frisolone, FAPR, RDR, CRR, CRI Official Court Reporter 23 24 25 Anthony D. Frisolone, FAPR, RDR, CRR, CRI, CSR Official Court Reporter