Steve Bannon Charged With Fraud and Money Laundering in Border Wall GoFundMe Campaign

By - August 21, 2020
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New York federal prosecutors charged ex-Trump advisor Steve Bannon and three others with defrauding donors of hundreds of thousands of dollars as part of a crowdfunding campaign on GoFundMe to raise funds to support the building of Trump’s border wall.

Bannon was arrested this morning, according to the US attorney’s office. Bannon’s attorney did not respond to a request for comment from CNN reporters. Bannon will make his first court appearance in New York City later today.

The four men under federal indictment are being charged for embezzling hundreds of thousands of dollars donated to the group ‘We Build The Wall’ and using the money for personal expenses. The alleged scheme is particularly odious because it used the border security concerns of average Americans to raise millions of dollars for the alleged criminals’ financial gain.

Federal prosecutors allege that Bannon, through the non-profit organization Non-Profit-1, used $1 million from We Build the Wall to pay defendant Brian Kolfage and cover Bannon’s expenses of several hundred thousand dollars.

Bannon, Kolfage, Timothy Shea, and Andrew Badolato have been charged with conspiracy to commit wire fraud and one count of conspiracy to commit money laundering. The men face decades in prison if they are convicted on all charges.

Hundreds of Thousands of Donors Defrauded

According to Manhattan US Attorney Audrey Strauss, the defendants defrauded We Build The Wall of funds from hundreds of thousands of donors, capitalizing on their desire to build a border wall to raise millions of dollars. The money was raised under the pretense that all the funds would be used for wall construction.

Strauss added that contributors were assured that Kolfage, the founder and public face of the group, would not be paid, the defendants schemed to send hundreds of thousands of dollars to Kolfage, which he used for personal expenses.

It is estimated that We Build The Wall raised at least $25 million, and Bannon alleged received more than $1 million through is nonprofit that he used for personal expenses and to compensate Kolfage.

Kolfage and Bannon Lied to the Public About Taking No Compensation

Federal prosecutors say that Bannon and the other defendants used the nonprofit and a shell company to hide the money paid to Kolfage by using phony invoices and fake vendor arrangements. The indictment stated that to raise funds from average Americans, Bannon and Kolfage repeatedly said that Kolfage would not be compensated for his work.

Federal prosecutors added that Kolfage had payments made out to his wife and this was reflected in 1099 forms the nonprofit issued.

The We Build The Wall website claimed that all money raised would go to the federal government to build a border wall, and if they did not get enough money, they would refund all of it.

Within a week of the campaign being launched in 2018, they raised $17 million. Because of concerns about how the money was used, GoFundMe threatened to suspend the campaign unless a non-profit organization was identified into which the funds would be transferred. If they did not do this, GoFundMe said the money must be returned to donors. At that point, prosecutors say, that Bannon and Badolato created the nonprofit We Build the Wall Inc.

The goal of the program was changed to using the funds privately to build the wall. Past donors needed to agree to have their donations used for that purpose. They were told that all of the donations would be used to build the wall and not sent to Kolfage or the organization’s board.

Bannon and Co. Took More Steps in 2019 To Hide Fraud

In late 2019, Bannon, Kolfage, and Badolato learned that their nonprofit was under federal investigation, they took more steps to hide their fraud. This allegedly included encrypted messaging applications, stopping Kolfage’s salary payments, and taking text off the site that said Kolfage would not be paid. They noted on the site that he would start getting a salary in January 2020.

According to Inspector-in-Charge Philip Bartlett, all of the defendants engaged in fraud when they misrepresented how the wall’s funds were going to be used. They allegedly did not just lie to donors – they schemed to hide their fraud by making false invoices and accounts to launder the donations and conceal their crimes, showing no regard for federal law.

He added that this federal case should warn other criminals that no one in the US is above the law, including war veterans and millionaire political strategists.

If the men are convicted on the wire fraud and money laundering charges, they could receive up to 20 years in federal prison.