Who is Keith Raniere, the founder of NXIVM: Part 2

Before he founded the secretive group NXIVM in Albany, New York, Raniere was hawking memberships in an ill-fated network marketing company.
7:09 | 12/16/17

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Transcript for Who is Keith Raniere, the founder of NXIVM: Part 2
Reporter: Before he was the smooth-talking sage in a v-neck sweater on YouTube. When you get to something authentic you experience this type of creativity. This soul. Reporter: Before he founded the strange and secretive group with a name like a Roman numeral. Keith raniere's first big idea was hawking memberships in an ill-fated network marketing company called consumer's buyline -- His name is Keith raniere. His idea is called consumer's buyline. Reporter: This promotional video for consumer's buyline from the 1990s features the late Eddie Albert of green acres fame and a painfully awkward pitchman, 31-year-old, Keith raniere. Keith, happy to see you again. Yes. Happy to see you too. It's app amazing idea. Yes. Well, sometimes it even amazes me. But consumers buyline is wonderful. And it's working. It really was a brilliant idea. It was based on the premise of, as a group, collectively, we can buy in bulk, and we can save a lot of money. Reporter: Toni Natalie knew raniere before he was vanguard. She even appears in this 1993 "American spotlight" program lauding consumer's buyline. Traditional markups are between 4 and 800 percent in the cosmetic industry -- When you met him did he seem like a genius? He seemed like a geek so I sat down and I asked him, "So, you have a 240 iq, why are you doing this? Why aren't you curing cancer? Why aren't you really making a difference?" And he said, "This is the platform that I'm gonna use, and I'm gonna change the world. Reporter: Even then, the man who would become vanguard had big plans. In that American spotlight video, he sports a beard and a vision. As far as consumers buyline goes, its merely a stepping stone to really change the way we live and maximize human potential. Reporter: Unlike the guy from green acres, attorneys general in several states didn't think raniere's idea was quite so amazing, or honest. We first told you when the company was accused of being an illegal keep. Reporter: They agreed to pay hundreds of thousands of dollars to the states. After that, the company went bust. By that time, Toni Natalie was all in. She had left her husband and moved to Albany with her young son to be with Keith. They were together for nearly 6 years. She says in all-night talks, Keith drew out all of her secrets. Here's the smartest man in the world willing to help you through your emotional issues, and the reason that you're stuck in this world and the reason that you can't move on, and the reason you can't grow, is because you haven't learned how to heal that thing inside of you. I'll help you -- I'm going to help you -- Make it all better. I going to help you heal sexually, I'm going to help you heal intellectually. I'm going to show you the path. Reporter: Toni saw the early days raniere's partnership with Nancy Salzman, the creation of nxivm teachings known as "Rational inquiry" and methods that in court filings she later likened to brainwashing. What Keith does, he elicits all that information from you. My opinion is that what they do from there, is they take that information and they utilize that. Where can I not build you up, but break you down? Reporter: According to former members, the sessions came to involve practices such as bowing and a special handshake. At nxivm's Albany headquarters, people inside can be seen wearing sashes. Former members say different colors denote rank. Former coach Margot joy Leviton says classes begin with a ritual handclap. And we do something that we would call a huddle. So, everyone would put their arms around each other in this big circle -- We are committed to our success. And then straight into the mission statement. There are no ultimate victims, therefore I will not choose to be a victim. Reporter: Maher margos says anyone unwilling to go along with the rituals -- would be scorned. We would just suppress them and be like, "Oh, they just don't get it. They don't get it." I mean, if you step out of line you get punished you know, you get a lot of, like, strong thought control, you know, leveled at you. And you get told you -- What does that mean, strong-- It means, basically like, using intellect to try to -- to -- to out-logic you, to basically say, "You're the problem. This problem you're bringing us, no, no, you're the problem. If you question Keith raniere, the Hits the fan. Like what? You are -- you are prideful, how dare you, don't you realize you owe everything to him? I'm like what? Reporter: Jen kobelt is an aspiring actress in Vancouver, but when she joined nxivm she says her classmates treated her like a star. It was like I was a celebrity, like I walked in and everyone was like who's that girl and they were so nice to me. Reporter: She says members were encouraged to socialize with other members, outside friends faded away. We were told things not directly, but subtly do you wanna be surrounded by people who are, you know, just living their life, or do you wanna be surrounded by people who have an ethical mission to change the world. Reporter: In a recent statement, nxivm claims a ten year study shows "Extraordinary psychological benefits and results" from its teachings. And Margot the former coach says nxivm changed her life in positive ways. But she also describes feeling bullied and manipulated by some of the training, which she says caused her psychological trauma. It feels like they got in there and they messed with my wiring, or how I think, or my perceptions, without my consent. Reporter: And then there's a case mentioned in court filings involving a woman named Kristin Snyder -- she went missing in 2003 after walking out of a nxivm intensive in Alaska, police believe she paddled a kayak out into the bone chilling waters of resurrection bay and committed suicide. Her friend, Hillary, who asked us not to use her last name, reads a note that Kristin left. I attended a course called executive success programs, A.K.A. Nxium, I was brainwashed, and my emotional center of the brain was killed, turned off. Please contact my parents. Sorry. If you find me or this note. I am sorry life, I didn't know I was already dead. Reporter: Kristin Snyder's body has never been found.

This transcript has been automatically generated and may not be 100% accurate.

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