NXIVM Review and History

NXIVM is no longer active and is one of the most disturbing stories in MLM, Direct Sales and Network Marketing history.

The Albany, New York-based organization operated as a multilevel personal-development and training business before collapsing in 2018 amid a federal criminal investigation that ultimately resulted in the conviction of founder Keith Raniere for racketeering, sex trafficking, forced labor conspiracy, wire fraud conspiracy, and other crimes.

NXIVM grew out of Executive Success Programs (ESP), founded in 1998 by Keith Raniere and Nancy Salzman. The organization sold intensive personal and professional development courses based on Raniere's teachings and later expanded under the NXIVM name, with operations in the United States, Mexico, Canada, and South America. Participants paid thousands of dollars for courses and were encouraged to continue taking increasingly advanced programs while recruiting new students. Raniere was known internally as "Vanguard," while Salzman, who served as president and developed much of the curriculum, used the title "Prefect."

NXIVM used a multilevel structure built around the sale and recruitment of participants into its training programs. Members could become coaches and trainers, recruit additional students, and advance through a ranked organization represented by colored sashes. The U.S. Department of Justice stated that NXIVM "maintains features of a pyramid scheme" because participants paid thousands of dollars for courses, were encouraged to purchase additional training, and recruited others into the program in order to advance. Its principal offering was therefore not a conventional consumer product but a continuing series of self-improvement courses and coaching programs.

Raniere already had substantial MLM experience before NXIVM. In 1990, he founded Consumers' Buyline, a membership-based multilevel marketing company that promised commissions for recruiting customers into a discount purchasing program. Regulators in numerous states investigated the company, and New York sued in 1993 alleging that Consumers' Buyline operated as a pyramid scheme. Raniere later entered a consent judgment without admitting wrongdoing, agreed to a $40,000 payment, and was permanently prohibited from promoting or participating in an illegal chain-distributor scheme in New York.

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