Steve Bannon Arrested for Fraud in His Mexican Wall Scheme


Steve Bannon has been indicted. This is Breaking News. According to NBC News:

Former White House chief strategist Steve Bannon has been arrested after being charged with defrauding hundreds of thousands of donors through their campaign “We Build the Wall.” 

Bannon, along with three of his associates were indicted by investigators at the U.S. Southern District of New York on Thursday. They allege that the group of conservative leaders defrauded donors and that led to raising “more than $25 million to build a wall along the southern border of the United States,” according to the press release. 

According to TPM:

A federal grand jury in Manhattan has indicted former Trump campaign chairman Stephen K. Bannon, accusing him and three others of conspiracy to commit wire fraud and conspiracy to commit money laundering in a border wall fundraising scheme.

The sealed indictment, made public Thursday, accuses the four of organizing a scam around a fundraising campaign called “We Build The Wall,” which offered to crowdsource donations to build President Trump’s long-promised wall along the Mexican border.

Brian Kolfage, an Air Force veteran and triple amputee who ran the crowd-funded border wall project, was also charged. The group raised at least $25 million since its December 2018 inception.

Kolfage is accused of taking more than $350,000 in money raised for the project “for his personal use,” while Bannon allegedly siphoned more than $1 million out of the fundraising effort through an unnamed non-profit.

The charges were announced by acting U.S. Attorney for the Southern District of New York Audrey Strauss, who stepped into her role after Attorney General Bill Barr ousted her predecessor Geoffrey Berman. Barr had attempted to install an outside U.S. Attorney to lead the Manhattan office, but backed down from that move when Berman demanded that he be replaced by Strauss — his deputy and a well respected prosecutor — instead.

As TPM previously reported, Bannon served as the group’s advisory board chairman. He has reportedly been taken into federal custody with help from the U.S. Postal Inspection Service, the law enforcement arm of the U.S. Postal Service.

He is now being accused of funneling $1 million of donations to We Build The Wall through his non-profit to pay Kolfage and to cover his own personal expenses, according to the indictment.

Prosecutors also indicted Timothy Shea and Andrew Badolato, a Florida businessman.

The arrangement was created to conceal the payments to Kolfage, the indictment alleges, citing texts between Bannon and other members of We Build The Wall.

Bannon explicitly approved the scheme, telling Badolato in one text that there would be “no deals I don’t approve,” according to the indictment.

Prosecutors cite repeated assurances from Kolfage that he would “personally not take a penny of compensation from these donations” as part of the fundraising effort, which promised to crowd-fund the private construction of a wall with Mexico long promised by President Trump.

Bannon was allegedly deeply involved in the messaging prosecutors now say was fraudulent by telling donors that the entirety of their contributions would go toward the wall-building project and that Kolfage was taking no salary. Citing Bannon text messages, the indictment says he was involved in crafting this media strategy and that Bannon repeated the promise in press appearances.

When the defendants allegedly learned last October from one of their financial institutions that We Build The Wall was under criminal investigation, they took additional steps to conceal the payment scheme, according to the indictment. The scrubbed promises from the website that Koflage was taking no salary.

Within one month of the fund’s creation, in January 2019, the indictment says, We Build The Wall was faced with a quandary: having taken in $20 million in contributions by that point on a Go Fund Me, it had to convince the same donors to “opt in” to have the donations transferred to a non-profit that would then carry out the actual construction.

For that transfer to go through smoothly, Kolfage blasted out assurances that all of the money would go “directly to the wall!!! Not anyone’s pocket.”

Bannon, Kolfage, and their two co-defendants allegedly approved the statements “precisely because they understood and expected that donors would rely upon these representations, which were intended to maximize the fundraising potential of We Build The Wall.”

By the next month, however, prosecutors alleged that the scam had already begun. In February 2019, Kolfage was allegedly paid his first installment of $100,000 from donor funds.

That first infusion of $100,000 came as part of an alleged secret agreement by which Kolfage would be paid “$100k upfront” and would then receive $20,000 each month.

To hide the payments, prosecutors alleged, Kolfage had the payments be made out to his wife. Bannon’s non-profit allegedly issued a false 1099 form saying that it had paid Kolfage’s wife for “media.”

The alleged scam allowed Kolfage to live large, prosecutors said. The veteran used the money for “home renovations, payments towards a boat, a luxury SUV, a golf cart, jewelry, [and] cosmetic surgery,” among other things.

But the scheme began to unravel in October 2019, prosecutors say, after the defendants “learned from a financial institution” that there may be a federal criminal investigation into the fundraising campaign. After that, the indictment says, the group began to communicate over encrypted messaging apps, and scrubbed the website over any commitment to not take payment from the donated funds.

Prosecutors moved to seize funds across more than a dozen bank accounts, as well as a “Jupiter Marine boat named ‘Warfighter,’” the feds said Thursday.

From the start, We Build The Wall was wracked with controversy: Right-wing extremists and border vigilantes buzzed around the project constantly. The group’s first wall project, outside El Paso, spilled boulders into Mexico, causing an international incident of sorts. The second project, built feet from the Rio Grande, showed worrying erosion damage after a tropical storm passed over the area earlier this year.

The group appeared to take pleasure in disregarding the rules, attracting attention for submitting sloppy water table drawings and disregarding the permitting process altogether at times. When local officials or activists objected, Kolfage blasted them on Twitter, in effect siccing a devoted mob of wall funders against whoever was in his way.

But the publicity appeared to be worth it: Kris Kobach, the former Kansas Secretary of State and We Build The Wall’s general counsel, used the group’s extensive mailing list to fundraise for his own, ultimately unsuccessful, Senate campaign. Fisher Sand & Gravel, the primary contractor for both wall contracts, won a $400 million wall-building contract with the Trump administration late last year. In May, it won another contract from the Army Corps of Engineers for more than $1 billion.

We Build The Wall attracted some serious starpower in nativist Republican political circles: In addition to Bannon and Kobach, the Blackwater founder Erik Prince was on the group’s advisory board, as well as former Rep. Tom Tancredo (R-CO), former Milwaulkee County Sheriff David Clarke, and former Major League Baseball Pitcher Curt Schilling.

Kolfage parlayed the group’s publicity into ever more prominent endorsements, including from Donald Trump Jr. and even top Department of Homeland Security officials, who held a press conference at We Build The Wall’s first location praising its construction and technological assets like a fiber-optic detection system.

Before then, DHS had kept an arm’s length away from the private wall effort. That changed when Chad Wolf ascended to fill the role of acting DHS secretary.

After We Build The Wall’s initial successes, Kolfage also attempted to hustle his way into the PPE marketplace after COVID-19 washed ashore in America. Advertising boxes of masks purportedly sourced in Asia to his thousands of Instagram followers, Kolfage wasn’t the smoothest operator in the game: At least one of his purported caches of masks wasn’t his at all: It was a stock image of a Church of Latter Day Saints storehouse in Utah.

And while the group professed to be aligned with Trump — at one point declaring that the project was “Trump Approved” — the President eventually distanced himself from the project after the erosion incident, tweeting, “It was only done to make me look bad, and perhsps [sic] it now doesn’t even work.”