Albany — A federal appeals court in Texas has ordered NXIVM founder Keith Raniere to pay more than $444,000 in attorneys' fees to AT&T and Microsoft in a case in which he claimed the companies had marketed teleconferencing services using technology from patents that he owned.
A federal judge threw out the case last year and ordered Raniere to pay the two companies' legal fees after finding that Raniere offered no evidence that he owned the patents and allegedly gave contradictory and misleading testimony.
The patents were assigned to a company in Spokane, Wash. — Global Technologies, Inc. — and listed Raniere and three others as the inventors, records show. The patents detailed technology to allow teleconferencing over standard telephone lines while users could exchange data and other electronic information without interruption.
The federal judge said that Raniere failed to produce any written documentation or other credible evidence that he had an interest in GTI that would allow him to transfer the patents to himself, as he claimed had been done.
"Raniere also testified that his ex-girlfriend held her shares in the corporation in trust for him, based on a side letter executed between these parties, but he did not have possession of that letter nor did he know where the letter could be," the appellate court said in its decision this week. "The district court found that Raniere’s testimony surrounding the alleged transfer contradicted Raniere’s earlier representation that the shares had already been transferred to him and was 'wholly incredible and untruthful.'"
The district court judge who threw out the case said that "an award of fees is the least severe sanction adequate to deter similar conduct by (Raniere) in the future and to preserve the integrity of the court.”
The court awarded $300,295 to AT&T and $143,719 to Microsoft in attorney fees and costs.
The appellate decision was handed down as Raniere remains in the custody of U.S. marshals in an unrelated criminal case in which he is charged with sex trafficking and conspiracy to commit forced labor.
Raniere has been incarcerated without bond since he was deported from Mexico on March 25 and taken into custody by federal law enforcement officials in Texas. He is being held at the Metropolitan Detention Center in Brooklyn; a hearing in his case is scheduled to take place April 27.
It's unclear if Raniere has financial assets to pay the penalty in the civil case. The Justice Department said that for the past 18 months Raniere had been using a credit card and bank account in the name of a former NXIVM associate and girlfriend, Pamela Cafritz, who died in November 2016.
Federal prosecutors said the bank account has about $8 million, but have not said whether they would move to seize the account.
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