Steve Bannon served as President Trump's chief strategist in the White House after serving as his campaign CEO during his presidential run. Trump has distanced himself from the 'We Build the Wall' project.
Steve Bannon and three other men have been arrested and indicted accused of “defrauding hundreds of thousands of donors” through their “We Build the Wall” online fundraising campaign which raised more than $25 million.
Bannon pleaded not guilty, on Thurs, Aug 20, during an appearance in a Manhattan federal court. He has been released on bail.
A statement from the US Attorney’s Office in the Southern District of New York says: “Brian Kolfage, Stephen Bannon, and two others alleged to have funneled hundreds of thousands of dollars from the organization to Kolfage; all four defendants allegedly profited from their roles in the scheme.”
The statement said that Audrey Strauss, the acting United States Attorney for the Southern District of New York, and Philip R. Bartlett, Inspector-in-Charge of the New York Field Office of the United States Postal Inspection Service (“USPIS”), have announced the unsealing of the indictment that charges Bannon along with Brian Kolfage, Andrew Badolato, and Timothy Shea.
Brian Kolfage, 38, of Miramar Beach, Florida, Stephen Bannon, 66, of Washington, D.C., Andrew Badolato, 56, of Sarasota, Florida, and Timothy Shea, 49, of Castle Rock, Colorado, are each charged with one count of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering, each of which carries a maximum penalty of 20 years in prison.
The case is assigned to U.S. District Judge Analisa Torres in the Southern District of New York.
The indictment charges the four men of conspiracy to commit wire fraud and conspiracy to commit money laundering.
It reads in part:
Starting in approximately December 2018, Brian Kolfage, Stephen Bannon, Andrew Badolato, and Timothy Shea, and others, orchestrated a scheme to defraud hundreds of thousands of donors, including donors in the Southern District of New York, in connection with an online crowdfunding campaign ultimately known as “We Build The Wall” that raised more than $25 million to build a wall along the southern border of the United States.
In particular, to induce donors to donate to the campaign, Kolfage repeatedly and falsely assured the public that he would “not take a penny in salary or compensation” and that “100% of the funds raised . . . will be used in the execution of our mission and purpose” because, as Bannon publicly stated, “we’re a volunteer organization.”
Those representations were false. In truth, Kolfage, Bannon, Badolato, and Shea received hundreds of thousands of dollars in donor funds from We Build the Wall, which they each used in a manner inconsistent with the organization’s public representations.
In particular, Kolfage covertly took for his personal use more than $350,000 in funds that donors had given to We Build the Wall, while Bannon, through a non-profit organization under his control (“Non-Profit-1”), received over $1 million from We Build the Wall, at least some of which BANNON used to cover hundreds of thousands of dollars in Bannon’s personal expenses.
To conceal the payments to Kolfage from We Build the Wall, Kolfage, Bannon, Badolato, and Shea devised a scheme to route those payments from We Build the Wall to Kolfage indirectly through Non-Profit-1 and a shell company under Shea’s control, among other avenues. They did so by using fake invoices and sham “vendor” arrangements, among other ways, to ensure, as Kolfage noted in a text message to Badolato, that his pay arrangement remained “confidential” and kept on a “need to know” basis.”
Acting U.S. Attorney Audrey Strauss said: “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.
“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.
“We thank the USPIS for their partnership in investigating this case, and we remain dedicated to rooting out and prosecuting fraud wherever we find it.”
Inspector-in-Charge Philip R. Bartlett said: “The defendants allegedly engaged in fraud when they misrepresented the true use of donated funds. As alleged, not only did they lie to donors, they schemed to hide their misappropriation of funds by creating sham invoices and accounts to launder donations and cover up their crimes, showing no regard for the law or the truth.
“This case should serve as a warning to other fraudsters that no one is above the law, not even a disabled war veteran or a millionaire political strategist.”
The case is being handled by the Office’s Public Corruption Unit. Assistant United States Attorneys Nicolas Roos, Alison G. Moe, and Robert B. Sobelman are in charge of the prosecution.
The statement from the Southern District of New York emphasizes: "The charges contained in the Indictment are merely accusations. The defendants are presumed innocent unless and until proven guilty."
The entire indictment can be read here.
The White House and President Trump respond to the arrests and indictments
In the wake of the arrests and indictments, White House press secretary Kayleigh McEnany said in a statement: "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.
"President Trump has not been involved with Steve Bannon since the campaign and the early part of the Administration, and he does not know the people involved with this project."
President Trump, who was meeting with Iraqi Prime Minister Mustafa Al-Kadhimi on Thursday, responded to the news during the duo's press briefing at the White House, which you can watch below.
Trump said: “Well I feel very badly, I haven’t been dealing with him for a long period of time, as most of the people in this room know. He was involved in our campaign, he worked for Goldman Sachs, he worked for a lot of companies, but he was involved likewise in our campaign and for a small part of the administration very early on. I haven’t been dealing with him at all.
“I know nothing about the project other than I didn’t like - when I read about it - I didn’t like it. I said, ‘this is for government, this isn’t for private people.’ And it sounded to me like showboating and I think I let my opinion be very strongly stated at the time. I didn’t like it, it was showboating, and maybe looking for funds, but you’ll have to see what happens.
“I think it’s a very sad thing for Mr. Bannon, I think it’s surprising that this was something that as you know just by reading social media and reading whatever it is and by speaking to Mike and Mike and all of them, I didn’t like that project, I thought that was a project that was being done for showboating reasons. I don’t know that he was in charge, I didn’t know any of the other people either.
“But it’s sad, it’s very sad.”
Trump added: “I was not involved in the project, I have no idea who was. But I can tell you I didn’t know the people, the three people that were talked about, were people that I did not know. I don’t believe I ever met them.
“I don’t think that should be a privately financed wall, I don’t think -- it’s too complex, it’s too big. We’re now up to 300 miles almost in another week, week and a half, we’ll be up to 300 miles of wall at the highest level.
“They were even having construction problems - I was reading, the little I know about it I got from you - I was reading that they were having construction problems with the wall. They had a small area just to show people they could build the wall and they were having a lot of problems where it was toppling over and other things.
“I didn’t like it because I didn’t want to be associated with that. We built a very powerful wall, it was a wall that is virtually impossible to get through. It’s very, very tough, it’s very strong, it’s everything the border patrol wanted. I didn’t want to have a wall that was going to be an inferior wall and I felt this was going to be an inferior wall.
“I didn’t know about Bannon’s involvement, I didn’t know the other people. But I do think it’s a sad event.
“Again, Steve has had a great career at Goldman Sachs, he’s had a career with a lot of other people. I haven’t dealt with him at all over years now, literally years. I guess this was a project that he was involved in. In fact, you can see I made statements about it a long time ago, it was something that I felt was very much inappropriate to be doing.”
Last year, Kris Kobach, who sits on the board of We Build the Wall, told The New York Times: "I talked with the president, and the 'We Build the Wall Effort' came up. The president said ‘the project has my blessing, and you can tell the media that.’"