Stephen Bannon Charged With Fraud Over Border Wall Group

(Bloomberg) -- Stephen Bannon, one of the architects of Donald Trump’s 2016 presidential campaign, was arrested and charged with fraud over his involvement in an online group that raised more than $25 million to help fund a wall on the U.S.-Mexico border.

Despite portraying the We Build the Wall fundraising group as a volunteer campaign, Bannon received more than $1 million from the group and used some of it to pay personal expenses, prosecutors said. He’s expected to appear in a New York courtroom on Thursday. Three others were also charged in the alleged scheme, including the group’s founder, a disabled Air Force veteran named Brian Kolfage.

“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,” U.S. Attorney Audrey Strauss said in a statement.

The indictment came on the same morning that the Trump administration lost a bid to block a subpoena by the Manhattan district attorney for the president’s tax filings. And it offered an unsavory portrait of an effort by a onetime close adviser to Trump to help fulfill a core promise of the president’s first election campaign. Many of Trump’s supporters, including some who struggled financially, donated to the fundraising effort, trusting that the money would go directly to the construction of a border wall, according to prosecutors.

William Burck, a lawyer for Bannon, had no immediate comment on the indictment. Trump told reporters on Thursday that he didn’t support the fundraising project, because he didn’t want a privately financed border wall. The project “sounded to me like showboating,” he said, adding that the arrest was a “sad thing for Mr. Bannon.”

Possible Sentence

Long before the arrests, the wall-building project had drawn criticism, including claims that sections were being constructed in floodplains and creating erosion. The project was backed by high-profile Trump boosters like Blackwater founder Erik Prince and former Kansas secretary of state Kris Kobach. Donald Trump Jr. once called it “private enterprise at its finest.”

But the president seemed to disagree, tweeting last month that he thought it was “only done to make me look bad.”

If found guilty, Bannon, 66, could face as many as 20 years in prison, although it’s rare for the maximum sentence to be imposed. According to the authorities, he orchestrated the scheme alongside Kolfage, 38; Andrew Badolato, a 56-year-old entrepreneur from Florida; and businessman Timothy Shea, 49, the chief executive of a Trump-themed energy-drink company in Colorado.

Kolfage launched We Build the Wall on a crowdfunding site in 2018 to raise money to cover the cost of the wall. According to the indictment, the campaign promised supporters in social media posts and other solicitations that all the donations would go toward construction, assuring them that Kolfage would “not take a penny.”

In text messages, prosecutors say, Bannon and Badolato discussed how that promise would help boost fundraising by creating a positive media narrative and, in Badolato’s words, removing “all self-interest taint.”

In reality, prosecutors say, Bannon and the others orchestrated a scheme to make hundreds of thousands of dollars in secret payments to Kolfage. To conceal those payments, Bannon moved the funds raised by We Build the Wall through a nonprofit he controlled before the money was transferred to Kolfage, according to the indictment.

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