New York (CNN Business)A Finnish-Canadian designer was arrested in Canada Monday, after he was indicted in the United States for allegedly using his fashion business as a “façade of legitimacy” in order to conceal sex trafficking and other illegal activity, federal prosecutors allege.
The indictment, which was filed on Nov. 23 but not unsealed until Tuesday, charges Peter Nygard with nine counts including sex trafficking and racketeering charges, and alleges that between 1995 and 2020, Nygard and other employees allegedly used modeling and other fashion industry jobs to “lure victims into Nygard’s orbit and keep them there.”
Victims were then “forcibly sexually assaulted, drugged, and/or coerced into sexual contact with Nygard,” the indictment claims. Many of the alleged victims were underaged girls who came from disadvantaged backgrounds or had a history of abuse.
Nygard was arrested on Monday by Canadian authorities and is in custody in Winnipeg.
He is awaiting bail and extradition proceedings, according to a press release from Royal Canadian Mounted Police. He was chairman of Nygard International until February, when he stepped down after his offices were raided by US authorities.
A Canadian provisional arrest request revealed the “long term” investigation by US authorities into Nygard included interviews with “more than two dozen” alleged victims, and that he had at least 40 different corporate entities organized around the world — and that they maintain numerous assets including real estate, yachts and other property in multiple countries.
Ken Frydman, a spokesman for Peter Nygard, had no comment when contacted by CNN on Tuesday. Frydman previously told CNN after Nygard’s company offices in New York City and California were raided that the allegations were false and intended to damage Nygard and his businesses.
“Nygard welcomes the federal investigation and expects his name to be cleared,” Frydman said in a statement to CNN in February.
According to Nygard International’s now-removed website, he was known for his “fast to market” clothing that uses an electronic system to quickly move clothes from being designed to stores.
The indictment, unsealed Tuesday, mentions “at least dozens of adult and minor-aged females” who are alleged victims of Nygard, and prosecutors are asking any other victims to come forward.
Prosecutors said Nygard and some of his employees used fraud, force and coercion to cause the victims to engage in commercial sex, and allegedly maintained adult and minor female victims “for Nygard’s sexual gratification and, on occasion, the gratification of Nygard’s personal friends and business associates.”
“Nygard maintained control over his victims through threats, promises to grant or withhold modeling opportunities and other career advancement, granting and withholding of financial support and by other coercive means including constant surveillance, restrictions of movement and physical isolation,” the indictment said.
“Pamper parties” were gatherings allegedly paid for with Nygard’s business funds that offered free food, drinks and spa services, and prosecutors allege they were another way that Nygard and some of his employees recruited victims, the indictment claims. Some of his employees screened attendees for their physical appearance “to confirm that they would appeal to Nygard before allowing them onto Nygard property,” the indictment claims.
Parties often happened at his private island in the Bahamas, but prosecutors allege Nygard engaged in sexual assault and sex trafficking in the United States, Bahamas, Canada and elsewhere, often using his employees and company funds to “intimidate, threaten and corruptly persuade” people who alleged wrongdoing, the indictment said.
The allegations in the indictment match claims that victims have publicly made in lawsuits filed by attorneys Greg Gutzler and Lisa Haba, who told CNN that more than 100 victims have come forward with allegations of abuse since they filed a suit on behalf of 10 anonymous women against him in February.
“It really has been an international human trafficking ring of a magnitude we’ve never seen,” Lisa Haba told CNN in a March interview, months before Nygard’s arrest and indictment.
Haba and Gutzler said they have spoken to former employees who worked for Nygard and told them about their roles in luring, drugging and paying alleged victims of the designer.
“They were company employees, and they were employed merely to effectuate the sex trafficking ring. That was what their job was,” Gutzler told CNN in March.
After news of Nygard’s arrest, Gutzler said in a statement to CNN that the team representing victims hopes Nygard’s accomplices and co-conspirators are brought to justice.
“On behalf of the dozens of survivors of decades-long abuse, we are encouraged that a small measure of justice for Peter Nygard is finally developing,” Gutzler’s statement said. “We are relieved that some measure of accountability is hopefully forthcoming, but we would be remiss if we did not state that this is something that should have been done decades ago.”
CNN’s Paula Newton contributed to this reporting.
