Federal prosecutors in New York unsealed criminal charges today against Steve Bannon, President Trump’s former chief strategist, and three other men they alleged defrauded donors to a massive crowdfunding campaign that claimed to be raising money for construction of a wall along the Mexico border.
In a news release, prosecutors said Bannon and another organizer, Air Force veteran Brian Kolfage, lied when they claimed they would not take any compensation as part of the campaign, called “We Build The Wall.” Bannon, prosecutors alleged, received more than $1 million through a nonprofit he controlled, sending hundreds of thousands to Kolfage while keeping a “substantial portion” for himself.
The campaign, which publicly supported by several of the president’s allies, raised more than $25 million through hundreds of thousands of donors, the news release states.
Prosecutors alleged that Bannon and Kolfage along with two others — Andrew Badolato and Timothy Shea — routed payments from the crowdfunding campaign through the nonprofit and another shell company, disguising them with fake invoices to help keep their personal pay secret.
All four were arrested today and charged with conspiracy to commit wire fraud and money laundering.
Bannon, a law enforcement official said, was taken into custody off the coast of Westbrook, Conn., while aboard a 150-foot yacht owned by his friend, Chinese billionaire Guo Wengui — who is wanted by authorities in Beijing on charges of fraud, blackmail and bribery.
Bannon, 66, served on Trump’s presidential campaign and then as the White House’s chief strategist.
He was ousted in the summer of 2017 amid what appeared to be a major falling out with Trump, who derided his one-time confidant as “Sloppy Steve.”
A lawyer and a spokeswoman for Bannon did not immediately return messages seeking comment.
Asked about the matter Thursday, Trump said he felt “very badly” but asserted of Bannon, “I haven’t been dealing with him for a very long period of time.”
Trump said he felt the private fundraising effort was “something I very much thought was inappropriate to be doing.”
Private border wall is now sinking due to erosion.
“I don’t like that project,” Trump said. “I thought it was being done for showboating reasons.”
White House press secretary Kayleigh McEnany said Trump had “no involvement in this project,” and pointed to a tweet he issued last month in response to a ProPublica story about a privately funded section of wall, saying “I disagreed with doing this very small (tiny) section of wall, in a tricky area, by a private group which raised money by ads. It was only done to make me look bad, and perhaps it now doesn’t even work.”
“President Trump has always felt the Wall must be a government project and that it is far too big and complex to be handled privately,” McEnany said.
During the last presidential campaign, Trump vowed that Mexico — not U.S. taxpayers — would fund the border wall.
Those involved in the project had close ties to the administration, and campaign memorabilia was often pictured on the wall.
Trump’s son, Donald Trump Jr., was a guest at a symposium hosted by the group in New Mexico in 2019, where he praised the organization as “private enterprise at its finest.”
“Doing it better, faster, cheaper than anything else,” he added.
One of the group’s advisers, Kris Kobach, is the former Kansas secretary of state known for his hard-line views of immigration and close ties to the Trump administration. Earlier this month, Kobach was defeated in a Republican primary for U.S. Senate from Kansas.
In January, Kobach told the New York Times that he had described the organization to Trump in a personal phone call and that the president had given it his blessing.
“I talked with the president, and the “We Build the Wall Effort’’ came up,” Kobach said. “The president said ‘the project has my blessing, and you can tell the media that.’”
Other board members included Erik Prince, a conservative activist and defense contractor close to Bannon, as well as former congressman Tom Tancredo.
In a statement, an attorney for Prince said he joined the group’s advisory board because he was a believer in its mission to build a wall on the southern border.
“He had nothing to do with the conduct alleged in today’s indictment, was never contacted in connection with any investigation, and doesn’t know anything about it,” attorney Matthew L. Schwartz said.
Kobach and Tancredo could not be immediately reached for comment.
Bannon was brought in to lead Trump’s troubled presidential campaign in 2016, after it had cycled through two other campaign managers and was trailing in the polls to Democrat Hillary Clinton.
He was the impetus for some of Trump’s populist ideas and a provocateur, coming up with ideas such as bringing Bill Clinton’s accusers to a debate after damaging audio emerged of Trump suggesting he could sexually assault women.
Before working for Trump’s campaign, Bannon had promoted many of the same ideas that Trump espoused during the race via the conservative newssite he founded, Breitbart.
Once joining the White House as the president’s top political strategist, he kept a whiteboard of campaign promises in his West Wing office, along with newspaper articles where Trump had written messages to him with a Sharpie.
He was ousted after seven months in the White House, having clashed with a number of senior officials — most notably the president’s son-in-law, Jared Kushner.
Bannon was frequently profane and was accused by a number of other administration officials for leaking damaging information about them.
But he kept a prominent role in Trump’s Washington, throwing parties at his Capitol Hill townhouse that he called the “Breitbart Embassy” and hosting prominent government officials and media figures.
In early 2018, Trump viciously attacked Bannon for participating in Michael Wolff’s book “Fire and Fury,” where he gave damaging on-the-record quotes about Trump’s family, the president and the White House’s operations.
He has slowly come back into Trump’s orbit though he is not in regular touch with him. The president appreciated Bannon’s fierce defense of him during his impeachment, and Bannon hosted a pro-Trump podcast with Jason Miller, now the campaign’s strategist, until earlier this year.
In private, Bannon was often dim about the president’s focus and job in the White House, people who know him say, though he has remained publicly supportive.
Kolfage, 38, of Miramar Beach, Fla., is a military veteran who, in 2004, was severely injured in a rocket attack while he was stationed in Baghdad.
According to the “We Build The Wall” website, he lost both of his legs and his right arm instantly, and was in a coma for three weeks.
He would later go on to take a civilian role in the Air Force, work on a veterans advisory committee for then-Rep. Gabrielle Giffords (D-Ariz.) and found a coffee company.
Kolfage’s wife declined to comment.
In a 23-page indictment, prosecutors described how Kolfage and others in December 2018 launched the wall-building fundraising campaign to immediate success, raising almost $17 million in the first week — money they claimed would be given to the federal government.
But with success came scrutiny, and GoFundMe, the site the group had been using to collect funds, suspended the campaign and warned Kolfage the donations would be refunded if he could not identify a legitimate nonprofit to which they would be transferred.
Around that time, Kolfage recruited Bannon and Badolato, an entrepreneur and venture capitalist, prosecutors alleged.
The two took significant control of the campaign’s day-to-day activities and oversaw creation of a nonprofit, We Build The Wall Inc., to which funds could be transferred and spent on private construction of a border wall, prosecutors alleged.
The group claimed publicly and to the crowdfunding website through which they had initially raised funds that Kolfage would take no salary, and that “100 percent” of the money raised would be spent on wall construction, prosecutors alleged.
They also agreed that existing donors would have to opt in to having their funds transferred to the new nonprofit.
“I’m taking nothing! Zero,” Kolfage wrote on social media. He also wrote a mass email to donors asking them to buy from his coffee company because that was how he “keeps his family fed and a roof over their head.”
For his part, Bannon said during interviews, “we’re a volunteer organization,” prosecutors alleged.
Privately, prosecutors alleged, the men discussed how that messaging would drive donations and opt-ins, and from January to October 2019, they collected more than $25 million from new or existing donors.
And contrary to their public assertions, they schemed to make sure they were paid, the indictment says.
“As alleged, the defendants defrauded hundreds of thousands of donors, capitalizing on their interest in funding a border wall to raise millions of dollars, under the false pretense that all of that money would be spent on construction,” Acting Manhattan U.S. Attorney Audrey Strauss said in a statement announcing the case. “While repeatedly assuring donors that Brian Kolfage, the founder and public face of We Build the Wall, would not be paid a cent, the defendants secretly schemed to pass hundreds of thousands of dollars to Kolfage, which he used to fund his lavish lifestyle.”
In total, prosecutors alleged, Kolfage received more than $350,000 in donor funds, routed through various accounts and shell companies to help keep them secret, and used them to pay for home renovations, a boat, a luxury SUV, a golf cart, jewelry, cosmetic surgery, and personal taxes and credit card debt.
Bannon and the others also received hundreds of thousands of dollars, spending it on travel, hotels and personal credit card debts, the indictment says.
After learning of authorities’ investigation from a financial institution in October, prosecutors alleged, Kolfage and Badolato began communicating on encrypted messaging apps and added a statement to the campaign’s website that Kolfage would be paid a salary starting in January.
On Wednesday, Kolfage tweeted that he had deleted the campaign from the GoFundMe site, alleging it had blocked a separate attempt by him to raise money for those wanting to sue the Black Lives Matter group.
The “We Build the Wall” project had worked with Fisher Industries, a North Dakota company.
Trump has regularly promoted the firm, saying it should get a bigger border contract, comments that have concerned some officials in the Army Corps of Engineers and the Department of Homeland Security.
Earlier this year, Fisher received its biggest contract yet for work associated with the border wall.