An Unknowing Witness to Human Trafficking, Sex Trafficking, Money Laundering and More

By Sheila Carmody

Like so many days that summer, the temperature was supposed to be in the 90s so we agreed to go early, partly to avoid the hottest part of the day and also so we had the rest of the day free.

At 10 a.m. sharp, my friend Claire rang the doorbell.

I opened the door to my second floor condo: “Come in,” I shouted down the stairs.

The door burst open and I heard Claire climbing the stairs. I’d left the door partially open at the top on the landing so she knew to come right in.

She reached the top of the stairs, stepped over the threshold, took a breath and looked up.

“Let’s just walk over,” I said.

“Ok,” she said.

It was June 30th, 2018.

I didn’t know it at the time but Claire and I were about to embark on a mission that would end with me taking the witness stand in federal court, testifying against an alleged sex cult leader facing federal charges of racketeering, sex trafficking, sexual exploitation of a child and human trafficking.

An Idyllic Setting

I was visiting a friend from work in 2003 the first time I pulled into Knox Woods from Route 236 in the Saratoga County town of Halfmoon. Every curve in the road revealed a new cluster of condos and town homes warmed by the light of twinkling lampposts. They almost looked like fireflies dancing, weaving, bobbing, lighting the way though the dark thick woods.

Within days I called my real estate agent who had been showing me small houses for sale. I told her I wanted to look at a condo in Knox Woods. The first one she showed me was on Victory Way, 120 Victory Way.

I remember stepping inside the two bedroom 1,000 square foot abode the first time. It was dark but cozy. There was a living area to the left and to the right a kitchen with a tall counter in between.

I walked around the open kitchen area through a dining area and into the hallway leading to the bedrooms. The bedroom to the right was about 11’ by 10’, big enough for my daughter. To the left was a bathroom. It opened into the hallway and through a second door into the back bedroom. The bedroom in the back had a large walk-in closet.

A number of business cards were strewn on a table by the front door signaling to me the demand for a condo was high so I immediately made an offer. By October of 2003 we were in.

Two Women Walking

The winding roadways flanked by trees, carrying only local traffic, made Knox Woods perfect for evening strolls, and residents were often out walking, which is why the two dark-haired slender women I passed by every evening along the main drag of Knox Boulevard didn’t seem unusual at first.

Aside from the fact that they looked alike, the same height with the same slender build, and seemed always to be walking, nothing stood out about them. Well, not nothing. If there were nothing, I wouldn’t have noticed. I couldn’t really help but notice. A day didn’t go by when I didn’t see them walking together, looking very much alike.

Maybe they were a gay couple, I thought. That thought made even more sense when they started pushing a stroller with a young child.

That’s it: they must be a gay couple who had a baby. I never noticed one of them being pregnant, but they could have adopted the child.

Both had a Stepford-wife like demeanor about them. You would have thought a new baby would bring a smile to their faces but they walked without expression.

Again, they might not have been so noticeable but they were always walking along Knox Boulevard, and now pushing a baby stroller. And then one day, almost as if they were multiplying, there came a young man among them, walking in between them, a relatively young man with a beard and eyeglasses.

Speaking of Sex Cults

The first time I noticed Keith Raniere was while he was walking in Knox Woods. I wasn’t curious, though, until one day I was turning left onto Independence Boulevard from Victory Way. I glanced to the right before turning and there he was being interviewed by someone holding a video camera while another person held a mic.

There were no call letters on the mic, but he was clearly being interviewed.

I asked my friend, the same one who had introduced me to Knox Woods: “Who is that guy?”

It was a while ago but she probably said: “He’s the leader of a sex cult.”

I was confused.

A sex cult?

Who needs a cult for sex?

As time went on, I met someone new, moved in with him and rented my Knox Woods condo. The first two years I rented to a young man from India who worked for GE. The next two years I rented the condo to a couple, one of whom worked at a furniture rental company, which meant they had a fabulous selection of furniture.

Then came Kathleen O’Sullivan. Or at least that’s who she said she was.

I had advertised the apartment on Craig’s List, and Kathleen, or Kathy as I came to call her, showed up very interested in the apartment. She commented on the full complement of furniture still in the apartment, how beautiful it was.

Kathy had long blond hair. She was slender, petite. Pretty with small features.

I told her I would do an employment verification to qualify her for the apartment. She didn’t have an employer, she said, but was left a lot of money by her husband who passed away. She was willing to pay one year’s rent up front.

A whole year of rent up front was unusual but it didn’t seem like a problem since the lease would be signed and she would pay before she moved in. We agreed to meet later in the week when she would sign the lease and pay the rent – $11,100.

The House Sitter               

Kathy and I made the same arrangement for seven years in a row, usually meeting at a Starbucks where she signed a new lease and paid me cash for the entire year’s rent. I wasn’t expecting cash the first time, but cash is the same as money from what I remember so I took it. The money usually came in stacks of $100 and $50 bills in a paper bag with a handle. Seven years in a row she did this and by 2017 the bag contained $12,000 in cash.

The first time I interacted with Kathy aside from the lease signings was when the hot water heater in the upstairs condo leaked and damaged my furnace and walk-in closet.

I was out of town when the association manager called me to say there might be damage in the apartment. I called Kathy and arranged to have a friend take a look.

Turns out there was quite a bit of damage and my friend took pictures to send to the insurance company. He went back a second time and met with the representative of the company that eventually replaced the furnace and repaired the closet. It was my friend who first mentioned the name Dannielle.

I was confused: who’s Danielle?

That’s when Kathy started to refer to a house sitter. That must be Danielle, I thought.

Then I received some more confusing messages from my friend. The woman upstairs, my neighbor, came by while he and the repairman were waiting outside to go in. Danielle would ride up on a bike whenever he went to the condo. This time she was a little late and the neighbor from upstairs started to give them an earful.

They’re having sex parties in there, the neighbor told them.

It is kind of strange, my friend said. There’s no furniture in the apartment. No clothes in the closet.

Kathy did say she wasn’t planning to stay at the condo all the time. She had a sister who lived nearby and wanted a place to stay when she was in town.

I was unsure about the veracity of what the neighbor told them. Kathy did not seem like the type to hold sex parties. Also, I’m not sure that’s any of my business so I didn’t ask and only made sure the work was done.

A Bit of Background

At some point even before the hot water heater decimated the closet and furnace, I stopped by the association manager’s condo, which is almost directly across from mine. I was dropping off a lease; the property management association required one to be on file.

Bill, the association manager, told me he had seen “that guy” going into my condo, “that guy” being the same one I saw being interviewed and who my friend told me was the leader of a sex cult.

Bill handed me some print-outs of local newspaper stories about the organization called Nxivm (pronounced NEX-ee-um) with headlines like: Lawyer Attacks Nxivm Scheme; Paper Reveals Secrets of Firm; and Nxivm Courts Rich, Powerful and Influential.

I read the stories, still unclear about what it all meant. Over time, I simply viewed the articles as click bait for a struggling local newspaper.

In 2017, I had the opportunity to enter the condominium myself when I received a text from Kathy saying there was no hot water. My boyfriend suggested she check the breaker. The hot water came back on as soon as she flipped the switch. But the reason the breaker was tripped was likely because the hot water heater was nearing the end of its life so I scheduled a repairman to meet me there the next day.

I arrived at the condo and was greeted by a woman with dark hair who I assumed was Danielle, the house sitter. The condo was dark inside but I like a darker room so I wasn’t surprised. Yes, there were long red velvet drapes on the windows. Maybe it was a little eccentric.

The hot water heater was replaced and I didn’t think about the condo again until March 2018 when my boyfriend pointed out an article in The New York Times. The headline – “Authorities Raid Homes Linked to Cultlike Group that Branded Women” – grabbed his attention.

About Last Summer

Three months later, and several news stories in, I called Kathy, as in year’s past, to ask if she would be signing a new lease. When she didn’t return my call, I started to wonder if there was a connection between Kathy and Nxivm.

I called her a second time and when she didn’t call back, I was concerned, mostly because my condo was income for me and now we were close to one month before the lease would end and she wasn’t returning my calls.

I shared my concern with Claire, who has been a friend for decades and is a Rental Manager for a 165-unit rental community. She and my boyfriend told me I had to give Kathy a 30- day notice if I wasn’t planning to renew the lease. “You’re going to have to knock on the door and hand deliver the notice,” my boyfriend said.

The heat was already oppressive the morning Claire and I embarked on our mission to deliver the 30-day notice. We didn’t really discuss what we might encounter as we wound our way around some of the same paths frequented by Keith Raniere and what I now referred to as his harem.

When we reached the front door of the condo, I knocked. No answer. I knocked again. No answer. I knocked a third time. Again, no answer.

I grabbed the doorknob and the door popped open. It was unlocked. Claire and I exchanged glances and then went in, closing the door behind us.

I called out – hello! Maybe they didn’t hear me knock on the door. Still no response.

It was dark so I flicked the light switch on and the kitchen lit up. Suddenly we were in a time warp. We slowly made our way through the kitchen. There were plates and pots and pans on the counter and in the dish drainer. They were bone dry. There was a bulletin board on the wall leading out of the kitchen. Push pins were arranged in the shape of a heart. Instructions – one of which included a request I’d made to turn off the water to the outside tap during the winter – were written on a piece of paper.

My eyes wandered from the instructions, and, as they did, Claire eyes locked onto mine. I followed her lead as she slowly turned her gaze back toward the bulletin board. At the same time she lifted her hand, unfolded her index finger and pointed to a picture pinned to the bulletin board. Now we were both looking at that same thing.

It was “that guy.”

We looked back at one another. Now we knew. Nxivm was here.

Claire took a picture of the bulletin board and we ventured further into the condo, turning right, stepping into the hallway. The only light came from the small bedroom on the right. There were only the original blinds on the windows and the bright morning sun made its way through, lighting up a room that contained a treadmill so big it filled most of the 11’ by 10’ space.

We moved on into the bedroom at the end of the hall where the darkness started to close in on us. I knew where the light switches were having lived in the condo myself so I went straight to a light switch outside the walk-in closet. I flipped on the switch and we looked out over an unmade bed and beyond to the far wall and window where heavy red velvet drapes hung from ceiling to floor.

Curious, we both walked over and Claire reached up to pull the drapes back and bring in a little light. That’s when we noticed there were latex black-out drapes under the red velvet drapes. No wonder it was so dark.

There was very little in the bedroom besides a bed, a television and a tripod, a good size tripod sans camera, positioned at the bottom corner of the bed. I opened the walk-in closet and there were some towels and a few garments. We walked into the bathroom which held the usual soaps and shampoos.

The bathroom had two entrances, one from the master bedroom and one that led back through to the hallway. We made our way back into the hallway and walked back past the alley kitchen into the living and dining area. The only furniture was a table in the dining area. In the corner of the living room were boxes packed with personal items and mementos, pictures and the like. Star Trek DVD’s.

The walls were covered in cobwebs.

Claire turned to me: “They scurried like rats,” she said.

The mystery of who had been there, what they were doing, where they went and whose belongings were left behind was building as Claire and I reached the front door of the condo where we’d first begun our tour of what now felt like a dungeon. That’s when Claire noticed the magnets on the refrigerator.

“I suck big hard d-ck!” and “Slap my heinie” and “boner” were just a few of the words and phrases spelled out in colorful magnets on the refrigerator door. Claire took a second picture.

We were a little stunned when we stepped outside and back into the bright sunlight, partly because it was so bright compared to the apartment. Also because of what we’d just seen. I locked the door behind us, tucked the notice terminating the lease behind the window grille and decided to stop by the home of the association manager. He was and still is the eyes and ears of the neighborhood.

I’d often see Bill when I lived at 120 Victory Way but had only spoken with him intermittently since.

We stepped inside his condo. I haven’t seen anybody go in or out of there for several months, he said.

With the mystery unsolved we headed back to my place in the same development. I own two condos in Knox Woods. We moved back after my daughter graduated from college.

By mid-July we were convinced Kathy wasn’t coming back and figured we would have to find some place to store the contents of the condo for 30 days, as the law required.

When my boyfriend and I went to assess the remains of the condo I brought my Flip Video camera to record what was inside, to create sort of an inventory of the items we would have to remove.

Again, I knocked on the door. There was no answer so I unlocked the door and we went in. It was as though time had stood still. The same dishes in the dish drain, photo on the bulletin board, tripod by the bed. My boyfriend was mostly concerned with how we would remove the contents of the condo. The treadmill probably weighed 500 lbs.

We were also concerned the food in the kitchen would attract rodents so we emptied the refrigerator and some items from the cupboards into garbage bags and took it out to the dumpster.

Once again when we left I locked the door behind me. I still didn’t want to disturb anything until the end of the lease, which was now two weeks away.

Within those two weeks, I called Kathy again. This time she answered. She apologized for not calling me back and expressed an interest in signing another lease only this time she could only afford to pay six months in advance.

I was confused. By now I was reading about the FBI raiding nearby properties associated with Nxivm. If she were involved with this group, why would she want to continue renting in close proximity to an alleged crime scene?

I wasn’t sure what to think. I decided to exercise my option not to renew.

I agreed to extend the lease to the end of August so she had more time to move out.

The last time I spoke to Kathy was toward the end of August of 2018. She still didn’t mention Nxivm but said the apartment was mostly empty. My boyfriend had been in the apartment getting an estimate for work that had to be done and he said it was in good shape. All of the contents were gone and the cobwebs cleaned up.

I thanked her for cleaning out the place and for seven years of renting and we said our goodbyes.

Then Came the FBI

I thought the whole Nxivm thing was behind me until the day after I spoke with Kathy for the last time. I was sitting in my car under the shade of a tree, listening to a podcast, eating lunch and my phone rang. I usually ignore the phone when I don’t recognize the number but I was waiting for some messages to be returned so I answered.

It was the FBI.

I sat up straight in the driver’s seat of my car and immediately panicked.

You’re not in trouble, the voice on the other end of the phone said. He asked me about Victory Way and my tenant. “We’re coming to Albany and would like to meet with you, just to pick your brain,” he said.

My first reaction to all of this was – no!

No, no, no, no, no.

I’m embarrassed to report that I panicked, and lied, saying I wasn’t in the condo in June and I didn’t see a tripod. Suddenly it was 1978 again and the school Principal wanted to know where I was going.

It was not my best moment.

My only explanation, when I relayed the story to the prosecutor a few months later, was I thought if I said “no” the FBI would go away. She laughed heartily and relayed the story of her best friend from childhood who slammed the door in the face of the FBI when they knocked on her door to ask about the prosecutor who, at the time, was an applicant for the U.S. Attorney’s office. Apparently, the FBI is accustomed to such reactions.

My awkward opening with the FBI passed and they told me they were coming to Albany a week later.  We decided all three of us – myself, my boyfriend and my forever friend Claire – would meet with them together, as each of us had been in the apartment when it was still “occupied.”

We also decided to meet at the “scene of the crime,” 120 Victory Way.

It was a Thursday evening and we all piled into a car and drove over to the condo together. At this point the place was being painted. I told the painter to take the night off.

It was a warm evening and as soon as we got out of the car there they were: two of America’s finest in suit and tie.

We shook hands and all five of us disappeared into the condo. They pulled out their FBI badges to identify themselves and my boyfriend, as I had asked him beforehand, carefully checked their IDs.

They asked us to identify ourselves, which we did. I gave them a little history about the condo and what I knew of the woman who rented it over the last seven years, which wasn’t much. I gave them a short tour, shared what we saw when we went through the condo, before all of the contents had been removed.

Then I pulled the Flip Video from my bag and a piece of paper where I had written what was in each snippet of video. I also shared the leases I signed with Kathy over the years.

The taller of the two FBI agents asked if we had any still photos and Claire stepped forward with her phone.

She texted them the two photos she took: one of the bulletin board picture and the other of the refrigerator magnets.

I mentioned the Hale Drive townhouse, also in Knox Woods. It had been raided by the FBI several months earlier. Bill pointed out the place several years ago, I said.

Who is Bill, they asked.

Surely I would have thought my upstairs neighbor, the woman whose hot water heater damaged my closet and furnace a few years back, would have given them Bill’s name. At that point I suspected she was the one who gave them my name. I had seen her at the pool a couple of weeks earlier and I mentioned the tripod.

As we wrapped up, the taller of the two FBI agents asked me to nod in the direction of Bill’s condo on the way out.

“Seriously,” I asked.

“Yes,” he said.

When we left the condo, as instructed, I nodded in the direction of Bill’s front door and they headed off in that direction.

We hopped in the car and left.

I didn’t really think I was that helpful until this past May when I received a call from the same FBI agent.

“We need you to testify at the trial,” he said over the phone.

By then I had reflected on my experience with Nxivm. The apartment had been cleaned and repaired and painted. A new renter had moved in.

I spent a lot of time there after Kathy O’Sullivan moved out, getting it ready and showing it. It was back to being my place. I also knew now who Kathy O’Sullivan was. While most of the news photos were of Allison Mack, the Seagram sisters and Nxivm President Nancy Salzman, there was at least one of Kathy Russell the bookkeeper; she was Kathy O’Sullivan.

Over the next two weeks I communicated with the FBI via email. They arranged my flight to New York from South Florida where I now live. They also booked my hotel.

While my involvement was only tangential I realized they were telling a story in court and I was one small element of that story.

On Thursday, May 30th I boarded a flight from Palm Beach International airport to JFK airport in New York. I was supposed to testify the next day.

We landed at JFK and as instructed I called a car service. An Egyptian gentleman in a black Lincoln Town Car picked me up and drove me to a hotel in downtown Brooklyn. He talked nonstop from JFK to downtown Brooklyn mostly about what 9/11, Hurricane Sandy and Uber have done to his industry. His chatter was a good distraction for me.

I was communicating via text with the FBI almost immediately after landing. They were sending a man and a woman – she was with Homeland Security, he with the FBI – to my hotel to meet me an hour or two after I arrived to escort me to the U.S. Attorney’s office a couple of blocks away for a briefing.

It started to rain when they arrived to meet me in the lobby so I grabbed my umbrella and we walked the couple of blocks to the U.S. Attorney’s office.

We went up to the fourth floor where I met the prosecutor. All four of us sat down in a conference room where they told me what I could expect the next day. The prosecutor went over mostly what I had already told the FBI.

The prosecutor had four clips from the video I had taken last summer in the condo, video I knew they would be showing in court. They discussed the time table for the next day. I would probably not take the stand until after lunch.

Two hours later my new escorts drove me back to my hotel. It was a short ride but it was pouring rain.

The next day I took a long walk in Brooklyn. When I arrived back at the hotel I showered and waited while I watched Netflix. Around 12:30 p.m. I heard from my Homeland Security escort, a very nice talkative light-haired woman from Queens. The court breaks at 1 p.m. for lunch, she said. There are a couple of witnesses before you so you may not take the stand until 4 o’clock but we’ll come get you around 2:30 p.m.

I told her I’d be in the lobby by 2:30 p.m.

Almost as soon as I sat down in the lobby, I received a call from the same woman asking me to start walking towards them because I might take the stand sooner. Apparently, the judge gets testy when a witness is not queued up and ready to go.

I started up Tillary Street toward the federal courthouse which is right across the street from the U.S Attorney’s office. It was a beautiful sunny day and Brooklyn at the foot of the Brooklyn and Manhattan bridges is frenetic, to say the least. A good frenetic.

We met a block or two from the hotel and they escorted me around the corner onto Cadman Plaza East to the entrance of the federal courthouse. They made me feel comfortable every step of the way. I knew exactly what would happen and when.

They brought me upstairs to the jury room. The jury was in the courtroom and the jury room was a better place to wait than the small windowless witness room, they said. We chatted about a lot of things, almost none of it about the case. I texted my friend Claire: “I’m in the jury room.”

“OMG,” she texted back.

As my turn to take the stand approached, I was escorted to the smaller windowless witness room. I waited briefly and then I was summoned.

We moved a few steps to a set of double doors and the doors opened. I was warned in advance that the courtroom was bigger than I might expect. The judge was at the far end and he pointed to the witness stand. That was my cue. Suddenly all those years of watching courtroom dramas came in handy. This was a scene I had watched over and over again on television. I was comfortable. Not nervous at all.

I stepped up onto the witness stand, held up my right hand and swore to tell the truth, the whole truth and nothing but the truth. I sat and was asked to state and spell my name.

The prosecutor approached the podium and started asking me questions.

I tried to focus on what she was saying but couldn’t resist scanning the courtroom. The jury sat to my right, closer than they appear on television. The defense and prosecution tables were perpendicular to the judge and witness stand.

They showed the video I took all those months ago on a large screen on the wall and on computer screens, one in front of me and one in front of each juror. The prosecutor I met with the night before asked a few more questions. The defense was offered the opportunity to cross examine. They declined, as the prosecution expected.

I was excused by the judge, a tall slender older gentleman (think Mueller), and I stood, stepped down, walked past the jury back through the courtroom and out the door.

My new friends escorted me back down to the lobby of the federal courthouse and out the door into the sunny afternoon. Now back on Tillary Street I thanked them.

“I can find my way back,” I told them.

We parted ways and I walked back to the hotel. Along the way I called my boyfriend to let him know I was finished and all was well. When I arrived at the hotel, I walked through the lobby, up the stairs to the second floor where a bar fed out onto an outdoor patio.

I ordered a Tennessee Honey on the rocks, settled in and called Claire. Mission complete.

Sheila Carmody is the editor of the solutions-based book “Why We Failed: 40 Years of Education Reform” available on Amazon and the owner of two condos in Knox Woods.`

 

 

 

 

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4 Responses to An Unknowing Witness to Human Trafficking, Sex Trafficking, Money Laundering and More

  1. AppleXR says:

    What a great & detailed article. I’m very glad you have a sharp memory. I am envious in fact.

  2. Toni Natalie says:

    Shelia, I was in court the day you testified, you did a great job. Thank god you had the presence of mind to record what you saw. You were one of the many that shined the light that helpt put him away.
    #NoMoreVanguard #TruthForKristinSnyder #RodgerThat #NXIVM #whistlerblowers TheFallofNXIVM.com

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