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Wednesday, February 8, 2023

Steve Bannon, 3 Others Charged with Money Laundering in Border Wall Fundraising Campaign

Former White House chief strategist Steve Bannon was among four people charged in an indictment unsealed today alleging that hundreds of thousands of dollars collected in a private fundraising campaign to finance a wall along the Mexican border instead went to personal expenses such as travel and credit card debt.

Bannon was taken into custody by U.S. Postal Service agents this morning on a boat off the Connecticut coast. The former chairman of Breitbart News served in the Trump administration through August 2017.

Also charged were Brian Kolfage, an Air Force veteran who started We Build the Wall as a GoFundMe campaign in December 2018 and, with Bannon, turned it into a 501(c)(4) the following month after the crowdfunding website told him that the money raised in the campaign — $20 million by that point — would be returned to donors unless there was a legitimate nonprofit organization to which the funds could be transferred. Also charged were Andrew Badolato, a Florida venture capitalist, and Timothy Shea, who prosecutors say controlled a shell company through which payments to We Build the Wall were routed to Kolfage.

Audrey Strauss, the acting United States Attorney for the Southern District of New York since the Trump administration fired U.S. Attorney Geoffrey Berman two months ago, said today that 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,” Strauss said. “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.”

The online campaign would ultimately raise more than $25 million. Kolfage publicly said 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.” The indictment says that in transferring the GoFundMe cash to the nonprofit, “the defendants made and caused to be made a series of representations and gave assurances to the Crowdfunding Website – intended to induce the Crowdfunding Website to release the donor funds to We Build the Wall.” Instead, the indictment states, the quartet “worked together to misappropriate hundreds of thousands of dollars of those funds for their own personal benefit.”

“Kolfage went so far as to send mass emails to his donors asking them to purchase coffee from his unrelated business, telling donors that the coffee company was the only way ‘he keeps his family fed and roof over their’ head, because Kolfage ‘was taking no compensation’ from We Build the Wall.”

The defendants covertly reached an agreement, prosecutors said, that Kolfage would receive $100,000 up front and then 20 percent of donations per month, and this was funneled to him through third parties. Kolfage personally used more than $350,000 in donor funds, said prosecutors.

Bannon received more than $1 million in We Build the Wall funds, and allegedly used some of the money to cover hundreds of thousands of dollars in personal expenses.

“Beginning in or around April 2019, and to further conceal payments of We Build the Wall funds to Brian
Kolfage, the defendant, his secret salary of approximately $20,000 was passed indirectly through other third-party entities that were purported vendors for We Build the Wall, including one under the control of Timothy Shea,” the indictment states.

Each of the defendants are charged with one count of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering, with each count carrying a maximum penalty of 20 years in prison.

“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,” said Philip R. Bartlett, Inspector-in-Charge of the New York Field Office of the United States Postal Inspection Service. “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.”

Bannon was scheduled to virtually appear in court today in the Southern District of New York, while Kolfage was appearing before U.S. Magistrate Judge Hope T. Cannon in the Northern District of Florida. Badolato was appearing before U.S. Magistrate Judge Thomas Wilson in the Middle District of Florida, and Shea was appearing before U.S. Magistrate Judge Kristen L. Mix in the District of Colorado.  The case is assigned to U.S. District Judge Analisa Torres in the Southern District of New York.

Kolfage tweeted Wednesday before his arrest, “@WeBuildtheWall has officially deleted the largest @gofundme campaign ever from the GFM platform. WE will not give them another penny after raising $27million. We are taking our business to @FundRazr where censorship doesn’t happen.”

“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,” President Trump said at the White House today when asked about the arrests. “I think it’s a very sad thing for Mr. Bannon.”

He added that he thought the We Build the Wall barrier was “inferior” and “inappropriate.”

Bridget Johnson
Bridget Johnson is the Managing Editor for Homeland Security Today. A veteran journalist whose news articles and analyses have run in dozens of news outlets across the globe, Bridget first came to Washington to be online editor and a foreign policy writer at The Hill. Previously she was an editorial board member at the Rocky Mountain News and syndicated nation/world news columnist at the Los Angeles Daily News. Bridget is a terrorism analyst and security consultant with a specialty in online open-source extremist propaganda, incitement, recruitment, and training. She hosts and presents in Homeland Security Today law enforcement training webinars studying a range of counterterrorism topics including conspiracy theory extremism, complex coordinated attacks, critical infrastructure attacks, arson terrorism, drone and venue threats, antisemitism and white supremacists, anti-government extremism, and WMD threats. She is a Senior Risk Analyst for Gate 15 and a private investigator. Bridget is an NPR on-air contributor and has contributed to USA Today, The Wall Street Journal, New York Observer, National Review Online, Politico, New York Daily News, The Jerusalem Post, The Hill, Washington Times, RealClearWorld and more, and has myriad television and radio credits including Al-Jazeera, BBC and SiriusXM.

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