Steve Bannon arrested and charged with fraud in connection with ‘We Build the Wall’ campaign

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Stephen K. BannonThe former adviser to President Trump and architect of his 2016 election campaign, was accused Thursday of defrauding donors as part of a private fundraising effort called We Build the Wall, which aimed to bolster the flagship initiative of the president along the Mexican border.

Mr Bannon, working with an injured Air Force veteran and Florida venture capitalist, conspired to deceive hundreds of thousands of donors by falsely promising their money had been set aside for new sections of wall, according to an unsealed federal indictment in Manhattan.

The fundraising effort raised more than $ 25 million, and prosecutors said Mr Bannon used nearly $ 1 million for personal expenses.

Despite the populist aura he tries to project, Mr Bannon is known to enjoy the high life, and he was arrested at 7.15am on a 150-foot, $ 35 million yacht owned by one of its business associates, fugitive Chinese billionaire Guo Wenguilaw enforcement officials said.

Working with the Coast Guard, special agents from the U.S. Attorney’s Office in Manhattan and federal postal inspectors boarded the yacht off Westbrook, Connecticut, officials said. Mr Bannon, 66, was on deck, drinking coffee and reading a book, when the raid took place.

The criminal charges, filed a week before Mr. Trump accepted the Republican nomination for a second term, marked a turning point for the flamboyant political strategist. Mr Bannon first came to prominence when he was in charge of right-wing media Breitbart, where he aligned himself with the alt-right, a loose network of groups and people who promote white identity .

As chief strategist, Mr. Bannon was one of the most powerful figures in the White House during the early days of the Trump administration, but he resigned in August 2017 after having frequently encountered other helpers.

With the indictment, Mr. Bannon became the seventh Trump associate to be charged with federal crimes, a list that includes Paul Manafort, Mr. Trump’s former campaign manager; Michael T. Flynn, the former national security adviser; and Michael D. Cohen, former lawyer and repairman for Mr. Trump.

The 24-page indictment, unsealed in Manhattan’s Federal District Court, is by far the most politically sensitive case Audrey Strauss, the acting US attorney in Manhattan, has dealt with since she took up court. took up his post after his predecessor, Geoffrey S. Berman, was sacked in June by Mr. Trump.

In a brief indictment Thursday, Mr Bannon, sunburned and unbrushed hair, pleaded not guilty to wire fraud conspiracy and money laundering conspiracy charges, each carrying one maximum sentence of 20 years in prison. The government agreed to release him from custody on a $ 5 million bond.

Walking to his car after being released, Mr Bannon said: “The whole fiasco is to stop the people who want to build the wall.”

Shortly after the accusations were announced, Mr. Trump had sought to distance himself from Mr. Bannon and the fundraising initiative, although the president also expressed sympathy for his former adviser.

“I feel very bad,” Mr. Trump told reporters in the Oval Office. “I haven’t dealt with him for a very long time.”

The president said he didn’t know anything about the multi-million dollar We Build the Wall campaign, but quickly contradicted himself.

“I don’t like this project,” Mr. Trump said. “I thought it was done for showboating reasons.” He called it “inappropriate” to pay for the border wall in private.

One of Mr. Trump’s sons, Donald Jr., publicly promoted the We Build the Wall effort during a event in 2019, calling it “private enterprise at its best”.

Donald Trump Jr. said in a statement Thursday that he had no involvement in the effort beyond praise at the event.

A White House official said President Trump was unaware Mr. Bannon would be arrested and that aides told him it had happened.

Attorney General William P. Barr was briefed on the investigation several months ago, according to a Justice Department official, and the Manhattan federal prosecutor’s office told him the indictment would be unsealed on Thursday. .

Authorities say Bannon hatched the plot to defraud donors along with three other men: Brian Kolfage, a 38-year-old Air Force veteran and triple amputee from Miramar Beach, Fla .; Andrew Badolato, 56, a venture capitalist from Sarasota, Florida; and Timothy Shea, 49, of Castle Rock, Colorado.

Mr. Kolfage and Mr. Badolato were arrested Thursday in Florida, and Mr. Shea, who prosecutors said funneled money for the group through a shell company he owned, was arrested in Denver.

Mr. Kolfage, who lost both legs and one of his arms while serving in Iraq, set up We Build the Wall as a GoFundMe page in December 2018. It was an immediate success, raising nearly $ 17 million. dollars during its first week online, prosecutors mentioned.

To persuade potential donors to contribute to the effort, prosecutors said Mr Kolfage had promised them that he “would not take a dime in salary or compensation” and that all the money he raised would be used “in carrying out our mission and purpose.” According to the indictment, Mr. Bannon described We Build the Wall as a “voluntary organization”.

But it was all bogus, prosecutors said. Instead, they claimed, Mr. Kolfage secretly took over $ 350,000 in donations and spent it on home renovations, boat payments, a luxury SUV, a golf cart, jewelry. and cosmetic surgery.

Mr Bannon, working through an unnamed nonprofit, received more than $ 1 million from We Build the Wall, said prosecutors, whom he used to pay in the hundreds thousands of dollars in personal expenses.

Court documents suggested prosecutors were in possession of several text messages between the men, including one in which Mr Kolfage told Mr Badolato that the payment system was “confidential” and should be maintained on a “need-to-know” basis. ‘knowing”.

Mr. Kolfage initially pitched We Build the Wall as a way to get around the considerable legal and political obstacles to erecting the barrier Mr. Trump has been longing for. While the group has obtained the approval of some senior officials of internal security and border patrol, it also caused a backlash on its ties to Mr. Trump’s associates and his construction methods.

The federal government built portions of the wall well inside the US side of the border on federally owned land. But the sections built with private funds – just under five miles in all, according to the We Build the Wall website – were erected along the shore of the Rio Grande in New Mexico and Texas.

Environmental groups have disputed these portions, citing potential damage. When experts recently said that sections along the river could fall into the river, even Mr. Trump has criticized the project.

It is still unclear exactly when the year-long investigation into the alleged scheme began. But last year, a bank informed Mr. Bannon that federal prosecutors had subpoenaed cases related to We Build the Wall, according to a person briefed on the matter.

Prosecutors said despite the effort’s swift success, questions were almost instantly asked “about Mr. Kolfage’s track record” and the viability of his pledges to use the money he raised to build Mr. Trump’s wall.

Because of these concerns, prosecutors said, GoFundMe warned Mr Kolfage that if he did not find a “legitimate nonprofit” to handle the money, he would return it to donors. Mr Kolfage said the group had determined that only $ 800,000 of the funds needed to be returned.

“No rules have been broken,” he said in an interview last year.

As issues with donors intensified, Mr Kolfage said he would create an advisory board and incorporate the group as a We are building the wall Inc.

Mr. Kolfage enlisted Kris Kobach, the former Kansas secretary of state, to serve on the board. Mr. Kobach, a longtime Trump supporter and prominent immigration advocate, was not named in the indictment.

Mr Kolfage also brought in Mr Bannon, who joined Mr Trump’s campaign as chief executive in August 2016 and later became the chief White House strategist.

On several occasions, prosecutors said, Mr Kolfage falsely assured his donors that every penny they gave him would go to the wall.

“It is not possible to steal money,” he said at one point, according to the indictment. “We have an advisory committee.”

When special agents from the Manhattan federal prosecutor’s office and postal inspectors boarded Mr. Guo’s yacht, the Lady May, in Long Island Sound, they searched the ship and seized Mr. Bannon, officials said.

Investigators also conducted further searches in Florida, Colorado, Nevada, Missouri and Virginia, including the homes of all of the defendants, officials said.

Mr. Guo, a real estate mogul, has been in exile since 2014 after fleeing China in anticipation of allegations of corruption and rape by his government.

While living abroad – sometimes in a lavish apartment overlooking Manhattan’s Central Park – he formed relationships with Chinese extremists like Mr. Bannon and bought a membership in Mr. Trump’s Mar-a-Lago Club in Palm Beach, Florida.

Almost immediately after leaving the White House, Mr. Bannon formed a lucrative financial bond with Mr. Guo that began with a loan of $ 150,000, according to a note prepared in May 2019 and obtained by The New York Times.

The GoFundMe page on which Mr Bannon and his co-defendants raised funds is now inactive. On Wednesday, less than 24 hours before their arrest, Mr Kolfage made an appearance on Mr Bannon’s podcast and explained the deactivation as an example of how tech companies are censoring conservative discourse online.

When Mr Bannon asked how people can continue to donate money to the Wall campaign, Mr Kolfage responded by directing potential donors to his personal website, as well as one specifically for Wall funding. .

“How do people access We Build the Wall?” Mr. Bannon said.

“Stop going to GoFundMe,” Kolfage replied. “Go ahead. Go directly to our website. “

Reporting was provided by Jeremy Peters, Stephanie Saul, Michael S. Schmidt and Juliana Kim.

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