A billionaire liquor heiress has been secretly paying the legal fees of her co-accused sex cult members, causing a possible conflict of interest, prosecutors allege.

Clare Bronfman, heir to the Seagram fortune, is said to have been funding the legal costs for her NXIVM co-defendant, group guru Keith Raniere, federal prosecutors have alleged in new court filings.

Bronfman, Raniere and other alleged cult members, are facing racketeering conspiracy charges and accusations of luring sex slaves into the group in Albany, New York State.

Another co-defendant, former Smallville actress, Allison Mack, is charged with recruiting women into a secret society within the cult, known as DOS, and enforcing discipline within the group.

NXIVM founder Raniere, allegedly coerced female members into acting as his sex slaves within DOS, in which many of the women were branded with Raniere's initials, prosecutors say.

Clare Bronfman leaving the Brooklyn Federal Court after being arraigned in connection with the NXIVM case in October

Group leader Keith Raniere meeting the Dalai Lama at Vanguard Week, an annual week-long celebration of the guru's birthday in 2009

Raniere is charged with racketeering, forced labor, wire fraud, sex trafficking, attempted sex trafficking and conspiracy to commit identity theft.

In an earlier court hearing it was revealed Raniere and another female member of the group allegedly locked a woman in a room for two years because she was affectionate towards a man who was not her 'master'.

A total of six defendants have currently been charged in relation to the case.

Bronfman, who has homes in New York, Fiji and California, is known as an equestrian show-jumper and philanthropist.

She is the youngest daughter of the billionaire philanthropist and former Seagram chairman, Edgar Bronfman Sr.

Currently the 39-year-old he is out of jail on a $100 million bond on money laundering and identity theft charges in the high-profile NXIVM case.

Seagram founder, Samuel Bronfman, made millions during the prohibitions era of the 1920s, making liquor in Montreal, Quebec, where alcohol production was still legal.

In a filing on Friday, prosecutors said they discovered Bronfman is 'the primary contributor' to an irrevocable trust fund that has been paying the legal fees of her co-defendants.

The NXIVM Executive Success Programs where women were said to have been inducted as sex slaves for leader Keith Raniere

Former Smallville actress, Allison Mack, is charged with recruiting women into the NXIVM cult

Mack was a popular child star in Canada thanks to her role on Opposite Sex, which also starred a young Chris Evans and Milo Ventimigli (above), and Smallville

The documents filled by state prosecutors state: 'The government has learned that the legal fees of multiple witnesses and potential witnesses are also being paid by Bronfman or the Trust, and that there have been efforts to pay the legal fees of other witnesses.'

Clare Bronfman's financial contributions to all of the cases raises questions because 'it may subject an attorney to undesirable outside influence; and raises an ethical question "as to whether the attorney's loyalties are with the client or the payor"', a Brooklyn federal court document said.

Marc Agnifilo, a lawyer acting for Raniere told NBC News today: 'As I informed the court at the inception of the case, an irrevocable trust has been created with an independent trustee and legal fees are paid from the trust.

'To the extent that Ms. Bronfman put some, most or all the money into the trust, she has absolutely no control over how the trustee pays out on the legal fees.

'The government is frustrated that no one has pleaded guilty, and it is blaming that on potential conflicts when the real reason no one has pleaded guilty is because no one is guilty.'

Bronfman is not accused of sex trafficking, but along with her sister Sara, she is said to have enticed Mack when she considered joining the group, in the hope she would become their Tom Cruise-like figure to raise its profile - much like the Mission Impossible actor had done with Scientology.

Raniere is charged with racketeering, forced labor, wire fraud, sex trafficking, attempted sex trafficking and conspiracy to commit identity theft

NXIVM founder Raniere, allegedly coerced female members into acting as his sex slaves, many of which were branded with his initials

In a previous statement to NBC News Bronfman's lawyer Susan Necheles, said: 'Clare Bronfman did nothing wrong. NXIVM was not a criminal enterprise but instead was an organization that helped thousands of people.

'The charges against Clare are the result of government overreaching and charging an individual with crimes just because the government disagrees with some beliefs taught by NXIVM and held by Clare. This is not how things should be done in America. We are confident that Clare will be exonerated.'

Bronfman is the youngest daughter of Edgar Bronfman Sr, the billionaire philanthropist who was formerly head of Seagram.

Her mother is Rita Webb, the British-born second wife of Bronfman, who would divorce and then remarry Edgar shortly after Bronfman's birth. Rita Webb - now known as Georgiana Bronfman - has since married British Chariots Of Fire actor Nigel Havers, making Clare is step-daughter.

Rita and Edgar's second divorce split the family, with the girls living in England and Kenya with their mother while their father stayed in thew United States.

They would visit him in New York City as well as his nearby home in Westchester, and even took him to a NXIVM meeting at one point.

When she was 17, Bronfman competed in equestrian events and continued her showjumping career for a decade.

She was ranked 12th in the country and 80th in the world at her peak until she gave it all up though for NXIVM.

Bronfman (left) daughter of the late billionaire philanthropist and former Seagram chairman Edgar Bronfman Sr, leaving the Brooklyn Federal Court for an earlier court hearing

Bronfman became involved in organizing Vanguard Week, the annual week-long celebration of Raniere's birthday.

The sisters were able to use their connections to attract big name guests like the Dalai Lama, who visited the group and made an appearance in Albany in 2009.

That was done through the charitable organization they founded with Raniere, World Ethical Foundations Consortium, funded by money from their grandfather, who founded Bronfman's Distillers Corporation.

Bronfman denies racketeering conspiracy and conspiracy to commit identity theft charges.

Raniere is currently in jail without bail and Mack is living with her parents in California and said to be going to school while awaiting trial.

The next hearing has been scheduled to take place on Wednesday.