0001
1
UNITED STATES BANKRUPTCY COURT
2
NORTHERN DISTRICT OF NEW YORK
3
-------------------------------------------
4 IN
RE: TONI F. NATALIE, Chapter 7
Debtor, Case No. 99-16195
5
-------------------------------------------
6
NANCY SALZMAN,
7 Plaintiff,
8
-against-
Adv. Proc. No. 00-90169
9
TONI F. NATALIE and NATIONAL HEALTH OUTLET-A
10 PLACE OF CREATIONS, INC.,
11 Defendants.
12
---------------------------------------------------------
13 STENOGRAPHIC MINUTES OF
Deposition
14 conducted of Plaintiff, NANCY
SALZMAN, on the
15 15th day of November, 2000, at
the offices of
16 Whiteman, Osterman & Hanna,
One Commerce Plaza,
17 Albany, New York commencing at
10:59 a.m.;
18 before ELLEN J. FRANKOVITCH, a
Shorthand
19 Reporter and Notary Public within and for the
20 State of New York.
21
22
23
24
0002
1
APPEARANCES:
2
WHITEMAN, OSTERMAN & HANNA
One Commerce Plaza
3
Albany, New York 12260
On behalf of Plaintiff;
4 BY:
MARGARET CANGILOS-RUIZ, ESQ.
5
6
MICHAEL B. RUDIN, ESQ.
Suite 142, The Powers Building
7 16
West Main Street
Rochester, New York 14614-1601
8 On
behalf of Defendant.
9
10 JAMES P. TRAINOR, ESQ.
636 Plank Road, Suite 108
11 Clifton Park, New York 12065
On behalf of Keith Raniere.
12
13
14
15 ALSO PRESENT: TONI NATALIE
16 JOAN SCHNEIER
17
18
19
20
21
22
23
24
0003
1 S T I P U L A T I O N S
2
3 It is hereby stipulated and agreed by and
4
between the attorneys for the respective
5
parties hereto that the signing and filing of
6
the Notary's Oath be waived; that the
7
examination be conducted before Ellen J.
8
Frankovitch, a Shorthand Reporter and Notary
9
Public in and for the State of New York; that
10 the filing of the transcript of
testimony in
11 the Office of the Clerk of the Court be waived;
12 that the examining party will
furnish the
13 examined party one copy of the
transcript of
14 testimony as taken without cost
or charge; that
15 all objections to questions,
except as to the
16 form thereof, are specifically
reserved to the
17 time of trial; and that the
transcript of
18 testimony may be signed before
any Notary
19 Public or other officer
authorized to
20 administer oaths.
21
22
23
24
0004
1 NANCY SALZMAN,
2 (having been first duly sworn by the
3
Notary Public, was examined and testified as
4
follows:)
5 BY
MR. RUDIN:
6
Q. Ms. Salzman, can you tell us
where you reside.
7
A. 7 Grant Hill Road, Clifton
Park, New York.
8
Q. Do you reside there with
anyone other than yourself?
9
A. My daughter.
10 Q.
What is your daughter's name?
11 A.
Lauren.
12 Q.
How old is she?
13 A.
24.
14 Q.
Can you tell us your age?
15 A.
I'm 46.
16 Q.
And can you tell us what your educational background
17 is.
18 A.
I'm a nurse. I have a college
degree in nursing.
19 Q.
What kind of degree?
20 A.
I have a bachelor's degree in nursing.
21 Q.
Bachelor of science or bachelor of arts?
22 A.
Bachelor's of science in nursing.
23 Q.
Any other degrees beyond that?
24 A.
No.
0005
1
Q. Any other professional
training beyond that?
2
A. Well, I have a lot of
professional training beyond
3
that.
4
Q. Can you tell us what your
professional training
5
beyond nursing is?
6
A. I have several years of
Ericksonian training.
7
Q. Can you tell us what that
is?
8
A. It's a post-graduate type of
training that taught me
9
how to use and apply brief solution-based models of
10 therapy and hypnosis. And also I took a course at
11 Columbia University in hypnosis, but
that was given
12 with Dr. Herbert Siegel.
13 Q.
Is the training you received in this Ericksonian
14 method, was it through a college or
private
15 institution or was it individual?
16 A.
There were several types of trainings I took. I
17 took a series of courses through the
National
18 Institutes of Health. I took -- that was given in
19 Bethesda, Maryland. I took a series of courses at
20 Reuters University.
And then I took a series of
21 courses that were given privately by
different
22 practitioners of the Ericksonian
therapeutic method.
23 Q.
Can you tell us what the Ericksonian method is, or
24 at least generalize?
0006
1
A. Milton Erickson is
considered to be one of the
2
foremost experts in clinical hypnoses in the world,
3
and there's an Ericksonian Foundation that offers
4
courses all over the world. And
he is considered to
5
be the founder of brief solution-based models of
6
therapy. So I've taken many of
those courses since
7
1979.
8
Q. Can you tell us what brief
solutions means?
9
A. Originally when I started
studying this, it was a
10 new approach to therapy back in the
'70s. Now, it's
11 the standard accepted type of therapy.
12 Q.
When you say therapy, what kind of therapy?
13 A.
Psychotherapy.
14 Q.
Is it geared to any specific or special type of
15 ailments?
16 A.
It's a general approach to working with people who
17 have psychological issues, problems.
18 Q.
Does it entail prescribing any medication?
19 A.
No.
20 Q.
Now, you said you took a course at Columbia that was
21 sort of a similar type thing but on
hypnosis?
22 A.
That was more traditional hypnosis.
23 Q.
What other professional training or professional
24 endeavors have you taken part in?
0007
1
A. I took several courses in
neurolinguistic
2
programming.
3
Q. What is that?
4
A. It's a model of behavioral
change. It's a blend of
5
behavioral and cognitive psychology and formal
6
linguistics.
7
Q. Where did you take those
courses?
8
A. All over the country.
9
Q. Through recognized
universities or recognized
10 educational programs?
11 A.
NLP is taught through different institutions all
12 over the country.
13 Q.
What types of institutions?
14 A.
There's an institution in New Town, Pennsylvania
15 called the Eastern NLP Institute. I took training
16 from Connie Ray and Steve Andrus. They have the
17 largest institute in the country and I
can't
18 remember the name right now. It's in Colorado. I
19 took courses from Robert Dilts, one of
the founders,
20 and Richard Banbler, who's also one of
the founders.
21 And courses from John Grinder, who was
also one of
22 the founders, and Tad James. And Wyatt Wood Small.
23 Q.
In your professional -- as a professional, how would
24 you use neurolinguistics? What does it do, what is
0008
1
its purpose?
2
A. It's a model for human
behavior change.
3
Q. Well, that's very
general. What did you do with it;
4
beat people up to make them change, put them in dark
5
rooms? You must do something to
make people change.
6
Tell us what you do or what NLP does.
7
A. It's a type of -- it's a
cognitive approach where
8
you can talk to the person. It
has a model of
9
change; it has several different techniques to work
10 with.
11 Q.
You talk to people. I'm just
trying to figure
12 out -- I mean, most psychologists,
psychiatrists,
13 they talk to people, but obviously
this is something
14 different than traditional psychiatry
or
15 psychoanalysis?
16 A.
They use different models as well.
They might use a
17 Freudian model or Gestalt model. This is an NLP
18 model.
19 Q.
Is it recognized by practicing psychiatrists in this
20 country?
21 A.
When you say recognized?
22 Q.
Well, if you look in a book that's published either
23 by or for psychologists that are
physicians, would
24 they recognize this as a model that
would be useful
0009
1
for them?
2
A. There are psychiatrists who
use this model.
3
Q. I take it, obviously, the
rest --
4
A. And psychologists and social
workers who do use this
5
model. There are many different
models used in the
6
field.
7
Q. Can you tell me, what does
that model mean? I know
8
what Freudian does or what it is.
What does NLP do
9
that's different than Freudian?
10 A.
The goals are the same.
11 Q.
To cure the person or to change?
12 A.
To help the person make behavioral changes.
13 Q.
The methods are different, I take it?
14 A.
Yes.
15 Q.
What methods does NLP use to try to get people to
16 change? In general, then I'll go specific. But in
17 general?
18 A.
I don't understand what you mean by methods.
19 Q.
Do you use hypnosis? Do you use
sound deprivation,
20 light deprivation, sleep deprivation?
21 A.
There are a series of techniques in NLP, and NLP
22 uses things that are called reframing,
23 submodalities, belief change
procedures, parts
24 integrations. These are the names of techniques.
0010
1
Q. How do you perform those
techniques?
2
A. By talking to the person.
3
Q. It's just talking?
4
A. It's a talking type of a
therapy that acts as a
5
conscious and unconscious process.
6
Q. Does it also use
hypnosis?
7
A. It accesses different
states. Not deep trance, if
8
that's what you're referring to.
9
Q. You're not putting somebody
in a trance; you're
10 basically speaking to people, trying
to communicate?
11 A.
For the most part, that's correct.
12 Q.
The hypnosis part of your training would be separate
13 from NLP?
14 A.
Correct.
15 Q.
What period of time did you take these NLP courses?
16 A.
I started in 1985 taking neurolinguistic programming
17 courses, and I took them up to
probably '92.
18 Q.
Where were you working at that time?
19 A.
I had my own practice here, and for a period of the
20 time I worked for different people
that I was also
21 studying with.
22 Q.
Doing the same kind of thing?
23 A.
Teaching, and I learned to train and I taught NLP.
24 Q.
Before your learning training NLP and NLP, what was
0011
1
your employment before that?
2
A. Before learning NLP?
3
Q. Yes.
4
A. I worked with my husband at
that time, who was a
5
physician, and I saw clients and did some
6
counselling.
7
Q. What kind of physician was
he?
8
A. He was an internist.
9 Q.
They're not necessarily related to
what he did and
10 what you did?
11 A.
We did it in the same office and shared patients.
12 Q.
He's an internist and you're giving psychological
13 counselling, whatever; correct?
14 A.
I did counselling.
15 Q.
With his patients?
16 A.
With his and some other physicians as well.
17 Q.
And before that?
18 A.
That's it. I worked in a
hospital for a year.
19 Q.
What was your nursing specialty, if any?
20 A.
Well, my -- I didn't have a nursing specialty, per
21 se.
22 Q.
You weren't like a surgical nurse, for instance?
23 A.
No.
24 Q.
Just a general nursing degree?
0012
1
A. Yes.
2
Q. You say you had an office
with your husband. Were
3
you a licensed psychologist at the time?
4
A. No.
5
Q. Do you need to get a license
to be a psychologist?
6
A. No -- you need a license to
be a psychologist, yes.
7
But I wasn't a psychologist.
8
Q. You weren't a psychologist
back then?
9
A. No.
10 Q.
Have you ever applied for a psychology license?
11 A.
No.
12 Q.
What do you classify as what you do?
13 A.
Now?
14 Q.
Yes.
15 A.
I do coaching and I do a business where I teach
16 people strategies for success, and I
do coaching.
17 Q.
And that's got nothing to do with psychology, at
18 least not directly?
19 A.
No.
20 Q.
During this NLP period of time, did you have a
21 license as a psychologist?
22 A.
I did not.
23 Q.
Did you give people psychological counselling?
24 A.
I did psychotherapy.
0013
1
Q. And you're saying that's not
psychological
2
counselling?
3
A. It's referred to as
psychotherapy.
4
Q. Was what you were doing
recognized by the State of
5
New York?
6
A. I was not licensed as a
psychologist or social
7
worker in the State of New York.
8
Q. Did you utilize any of the
facilities of the State
9 of New York; for instance, any medical
care,
10 Medicaid or federal stuff, Medicare?
11 A.
I did not personally.
12 Q.
Did you ever bill Medicare for any of your services?
13 A.
No.
14 Q.
Your patients were always private pay patients?
15 A.
My patients were always private pay.
16 Q.
Did you ever at any time ever collect monies from
17 any state agency or health care
provider?
18 A.
Personally? No.
19 Q.
Did any of your businesses?
20 A.
I had licensed therapists who worked for me.
21 Q.
You weren't licensed but they were licensed?
22 A.
Correct.
23 Q.
Can you tell me who Maggie Willis is?
24 A.
Maggie Willis is a therapist who worked for me.
0014
1
Q. Where did she work for you,
what place?
2
A. I had two offices. I had an office at Stuyvesant
3
Plaza and I had an office at New Karner Road in
4
Albany.
5
Q. For what period of time did
she work for you?
6
A. She started working for me
-- you know...
7
Q. If you recall?
8
A. I think she worked for me
five years.
9
Q. During all that period of
time, was she a licensed
10 therapist?
11 A.
No.
12 Q.
At some point you're saying she had become a
13 licensed therapist?
14 A.
Yes.
15 Q.
Can you tell me what a licensed therapist is or was?
16 A.
Maggie was a social worker and Maggie had a social
17 work degree. There are six years of supervised
18 practice that a social worker must
have in order to
19 become licensed.
20 Q.
Was she doing her supervision through you or through
21 your company?
22 A.
Through my company, yes.
23 Q.
Who was her supervisor?
24 A.
Frank Macri.
0015
1 Q.
And he was, in fact, a licensed therapist?
2
A. That's correct.
3
Q. During this time while you
were running this office
4
and these people were doing therapy, what were you
5
doing?
6
A. A variety of different things. I was doing
7
organizational management and development. I was
8
teaching trainings for different organizations and
9
industry in health care.
10 Q.
Through this company?
11 A.
Yes.
12 Q.
So the company was sort of an umbrella company doing
13 different things?
14 A.
Yes.
15 Q.
What was the name of the company?
16 A.
The International Center for Change.
17 Q.
Was it d/b/a or corporation?
18 A.
Corporation.
19 Q.
Who were the principals of the corporation?
20 A.
Originally, it was myself and James Pike. And he
21 left the company in 1997 and then it
was just me.
22 Q.
And you carried on the company?
23 A.
That's correct.
24 Q.
Was it a New York corporation?
0016
1
A. Yes.
2
Q. And when you say -- this is
my words, so if I'm
3
wrong, correct me -- you did training for
4
corporations?
5
A. That's correct.
6
Q. What kind of training?
7
A. In communications, and some
organizational
8
development and management using neurolinguistic
9
programming as a model.
10 Q.
The word programming strikes me.
What do you mean
11 by neurolinguistic programming? I understand the
12 model thing, but does programming mean more than
13 that?
14 A.
It's the name of the model NLP, neurolinguistic
15 programming.
16 Q.
Did you give presentations and those kinds of
17 things?
18 A.
Yes.
19 Q. Are these for various corporations?
20 A.
Yes.
21 Q.
Are you still doing that type of work?
22 A.
Not as much as I was in the past, very little of
23 that type of work.
24 Q.
What type of work are you doing now?
0017
1
A. I have another company now.
2
Q. What is the name of that
company?
3
A. Executive Success Programs,
Incorporated.
4
Q. A New York corporation?
5
A. Delaware.
6
Q. Licensed to do business in
New York State?
7
A. I imagine. I'm in New York State.
8
Q. You're located in New York
State?
9
A. That's correct.
10 Q.
Who incorporated that business?
11 A.
I did.
12 Q.
Who physically did the paperwork for that business?
13 A.
Toni Natalie helped me do the paperwork.
14 Q.
You incorporated the paperwork --
15 A.
She helped me incorporate that.
16 Q.
Did you do it through the Internet?
17 A.
Yes.
18 Q.
And you got at some point a corporate certificate
19 from Delaware?
20 A.
Yes.
21 Q.
After you had the corporate, did you do bylaws of
22 the corporation, minutes to the
meetings, those
23 kinds of things?
24 A.
Yes.
0018
1
Q. And you keep those on a
regular basis?
2
A. Yes.
3
Q. And you think the
corporation is licensed in New
4
York State.
5
A. (No response.)
6
Q. I'm just asking you.
7
A. I filed the papers and I do
business in New York
8
State.
9
Q. And you pay taxes in New York
State?
10 A.
That's correct.
11 Q.
Who are the principals of that corporation?
12 A.
I am.
13 Q.
And who are the directors?
14 A.
I'm the director.
15 Q.
You're the sole director?
16 A.
Yes.
17 Q.
Who are the officers of the corporation?
18 A.
I am.
19 Q.
And that corporation is operating at the present
20 time?
21 A.
It is.
22 Q.
Can I ask you who First Principles, Inc. is, if you
23 know?
24 A.
It's another company that I own.
0019
1
Q. You own that?
2
A. Yes.
3
Q. Do you know of a guy named
Glazer out of New York
4
City? I don't know his first
name, but his last
5
name is Glazer.
6
A. I don't think so.
7
Q. Is that business licensed to
do business in New York
8
State?
9
A. First Principles? I also incorporated that business
10 in Delaware.
11 Q.
Not New York State?
12 A.
That's correct.
13 Q.
What does that corporation do?
14 A.
That corporation holds the patents for my other
15 company.
16 Q.
What patents are those?
17 A.
I have a couple of patents that are pending for
18 rational inquiry.
19 Q.
Copyrights or patents?
20 A.
They're patent pending.
21 Q.
The reason I ask, patents generally have to do with
22 mechanical devices.
23 A.
These are intellectual property patents.
24 Q.
Who invented these particular items that you're
0020
1
trying to get a patent on?
2
A. Keith Raniere.
3
Q. And they're in your
corporation name?
4
A. Yes.
5
Q. And you applied for them?
6
A. Yes.
7
Q. Does it list him and First
Principle as having any
8
interest in those patents?
9
A. I'm -- I don't know how to
answer the question.
10 They're his -- they have his name
because he's the
11 originator. They're owned by my company.
12 Q.
Did you purchase those from him?
13 A.
The patents?
14 Q.
Yes.
15 A.
No.
16 Q.
Have you made an agreement to pay him a remuneration
17 from whatever you received from those
patents from
18 any of the money that you earn for use
of those
19 patents?
20 (Ms. Cangilos-Ruiz and the witness
21 confer.)
22 MR. RUDIN: The same rules are going to
23 apply.
24 MS. CANGILOS-RUIZ: If you don't
0021
1
understand, don't answer.
2
A. I don't understand.
3 Q. Somebody's got patents. Do you think they've got
4
any value?
5
A. Yes.
6
Q. Did Keith just give you
those patents and say you
7
can do what you want with them?
8
A. Provided that I use them in
the way that he wants
9
them used, he gave me those patents.
10 Q.
And he doesn't expect to receive any money or
11 remuneration of any kind?
12 A.
At some point we have an agreement that he will get
13 a portion of my profits.
14 Q.
So there is an agreement that he will be paid for
15 the use of those patents at some
point?
16 A.
That's correct.
17 Q.
Is there an agreement for an amount or percentage?
18 A.
It's a percentage.
19 Q.
Of whatever you gross, I assume?
20 A.
Yes.
21 Q.
Could I ask, why are they being registered in your
22 name and not his name?
23 A.
That was the agreement that he made with me.
24 Q.
I'm asking you why.
0022
1 MS. CANGILOS-RUIZ: I am going to object
2
only because this question goes well beyond the
3
litigation that's framed right now in the
4
bankruptcy court.
5 MR. RUDIN:
No, it doesn't because the
6
thing is that your claim is Keith Raniere owned
7
my client's business 80 percent, but not on the
8
record. I want to know -- which
is the same
9
kind of situation here -- why he owns these
10 things not on the record.
11 MS. CANGILOS-RUIZ: I think because of the
12 judge's recent ruling, the 523
action has been
13 dismissed and we are now limited
to the 727
14 counts.
15 MR. RUDIN: Correct.
16 MS. CANGILOS-RUIZ: And I will give you
17 some leeway, but I am going to
have to reassert
18 my objection if you pursue this
line of
19 question because I do not see it
as relevant to
20 the causes of action as currently
framed.
21 MR. TRAINOR: I join in the objection.
22 BY MR. RUDIN:
23 Q.
What's your relationship with Keith Raniere?
24 A.
He's my mentor.
0023
1
Q. Can you tell me what that
means?
2
A. I met Keith in 1997 and we
made an agreement that he
3
would teach me his model and mentor me.
4
Q. What's his model?
5
A. It's called rational
inquiry.
6
Q. Is that a psychotherapy type
of model?
7
A. It's a philosophical type of
model that has
8
philosophical and educational and scientific
9
applications.
10 Q.
For what?
11 A.
A variety of different things.
12 Q.
I mean, is it for people, is it for?
13 A.
It's for -- the way that I use it is with people.
14 Q.
Can you tell me what Keith Raniere's address is?
15 A.
I don't know.
16 Q.
How long have you known Tony Natalie?
17 A.
Since 1997, November.
18 Q.
How did you meet her?
19 A.
I came into her outlet and my ex-husband's wife,
20 Sandy Padilla introduced me to her.
21 Q.
That was not a business relationship at that point,
22 I take it, just personal? When you got introduced
23 to her it was not for business
purposes?
24 A.
It was for business.
0024
1
Q. What were the business
purposes that you got
2
introduced to Toni Natalie for?
3
A. Sandy brought me to Toni's
place of business to meet
4
her and Toni introduced me to her company that day.
5
Q. Where was that place of
business?
6
A. In Clifton Park on Route 9.
7
Q. Do you remember the name of
the business?
8
A. National Health Outlet.