Seagram 'cult' sisters' trust fund on the rocks

The New York Post/March 26, 2010

Two Seagram's liquor heiresses have blown nearly $100 million on an upstate group headed by a shady svengali - and their furious father now may cut his girls off to keep the group - which he describes as a "cult" - from getting any more of the family fortune, sources said yesterday.

Billionaire mogul Edgar Bronfman Sr. is "considering legal action" to restrict the trust funds of daughters Clare, 30, and Sara, 33, after they lost $65 million in a commodities-trading scheme, according to one insider.

Among Edgar Bronfman's options, said a source, is to have his girls declared "financially incompetent."

The failed investment plan and the Bronfman sisters' staggering financial loss were revealed in court papers filed in Los Angeles and first reported by the Albany Times Union.

The scheme was engineered by Keith Raniere, a Brooklyn-born smooth talker who has been investigated for fraud in several states and is described in legal documents as a "compulsive gambler."

Raniere, 49, now heads a controversial Albany-based group, NXIVM (pronounced nex-eeum), that conducts "group awareness seminars."

The Bronfman girls are among his most devoted acolytes. Their dad has called the group a "cult."

Over the years, Clare and Sara have pumped millions into Raniere's group, buying him more than a dozen upstate properties and even letting him fly around in their private plane.

The Los Angeles lawsuit says that starting in 2006, the sisters pumped $65 million into the commodities scheme, which, along with a $26 million real-estate deal, quickly went south.

Raniere - who was trading the commodities using a mathematical plan he had concocted - blamed the financial losses on Edgar Bronfman. Raniere said there was a "conspiracy" and the "market was rigged" against him because the mogul didn't want his girls involved with NXIVM, court papers allege.

Raniere also said Bronfman "paid off" Forbes magazine to get it to publish a damaging story in 2006 about NXIVM to "ruin" the seminar firm. Raniere encouraged Clare and Sara to invest in his realestate and commodities plans because they were "spoiled rich girls all their lives" and he wanted to "teach them not to be that way," the Los Angeles documents allege.

The girls' losses marked the last straw for Edgar, a source said. Asked whether Bronfman was mulling cutting off Raniere's access to his daughters' cash, his adviser, Stephen Herbits, told The Post, "There has been no change in the excellent relations between Edgar M. Bronfman and his daughters, Clare and Sara."

A lawyer for the sisters didn't return calls.

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