By Larry Neumeister, Colleen Long and Jill Colvin, The Associated Press
NEW YORK — Former White House adviser Steve Bannon was arrested Thursday on charges that he and three others — including a Colorado man — ripped off donors to an online fundraising scheme called “We Build The Wall.”
The charges were contained in an indictment unsealed in Manhattan federal court that alleged Bannon received over $1 million himself, using some to secretly pay a co-defendant, Brian Kolfage, and to cover hundreds of thousands of dollars of Bannon’s personal expenses.
Federal prosecutors alleged that Bannon and the three others “orchestrated a scheme to defraud hundreds of thousands of donors” in connection with an online crowdfunding campaign that raised more than $25 million to build a wall along the southern border of the United States.
According to the indictment, Bannon promised that 100% of the donated money would be used for the project, but the defendants collectively used hundreds of thousands of dollars in a manner inconsistent with the organization’s public representations.
The defendants learned last October from a financial institution that the “We Build the Wall” campaign might be under federal criminal investigation and took additional steps to conceal the fraud, according to the indictment.
Charges included conspiracy to commit wire fraud and conspiracy to commit money laundering.
A phone at the office of Bannon’s lawyer went unanswered Thursday morning. A spokeswoman for Bannon did not immediately respond to a request for comment. It was not immediately clear who would represent Kolfage at an initial court appearance.
According to the indictment, Bannon promised that 100% of the donated money would be used for the project, but the defendants collectively used hundreds of thousands of dollars in a manner inconsistent with the organization’s public representations.
The others indicted in the case include 49-year-old Timothy Shea, of Castle Rock. Federal prosecutors say Shea was arrested on Thursday.
The indictment alleges Shea controlled a nonprofit and shell company that help route the money that was raised by using fake invoices and sham vendor arrangements.
In 2018, 9News started digging into the fundraising operation after finding that an address listed on its donation site was a post office box in Castle Rock. Shea’s wife, Amanda, told the television station that “they have been in contact with the White House to ensure the donations can be used on a border wall, but she did not say who at the White House she communicated with.”
Amanda Shea told 9News that if the wall wasn’t built, they intended to refund everyone’s money.
The Sheas are also connected to an energy drink company called Winning Energy, which is incorporated in Colorado, state business documents show. Timothy Shea is listed on the documents.
Winning Energy’s website advertises 12 ounce cans of “liberal tears” emblazoned with Trump’s likeness. “THE OFFICIAL FUEL OF WINNERS 12OZ ENERGY DRINK ULTRA HYDRATING LIBERAL TEARS MADE IN AMERICA,” the site advertises.
Former Republican U.S. Rep. Tom Tancredo, a firebrand conservative from Colorado, is listed on the website for “We Build The Wall” as serving on the groups advisory board. Tancredo has not been charged in the case.
Timothy Shea appeared before a federal judge on Thursday afternoon via teleconference where he was granted a $250,000 bond. He was barred from raising further money for We Build The Wall or from moving funds already raised by the group.
Shea was also ordered to have no contact with his codefendants in the case without lawyers present. He is required to relinquish any firearms he owns.
Kolfage, of Miramar Beach, Florida, and Andrew Badolato, of Sarasota, Florida, were also indicted in the alleged scheme.
Each of the four indicted were charged with one count of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering, each of which carries a maximum penalty of 20 years in prison.
Bannon pleaded not guilty in federal court on Thursday. He was arrested on a yacht off the coast of Connecticut.
At his hearing, Bannon had his hands cuffed in front of him while a large, white mask covered most of his face. He rocked back and forward as he sat on a chair in a holding cell at Manhattan federal court, from where he appeared via video as his lawyers were on the telephone.
The arrests make Bannon the latest addition to a startlingly long list of Trump associates who have been prosecuted, including his former campaign chair, Paul Manafort, whom Bannon replaced, his longtime lawyer, Michael Cohen, and his former national security adviser, Michael Flynn. Trump has also made clear that he is willing to use his near-limitless pardon power to help political allies escape legal jeopardy, most recently commuting the sentence of longtime political adviser Roger Stone.
The magistrate judge approved Bannon’s release on $5 million bail, secured by $1.75 million in assets.
We Build the Wall originally promoted a project for 3 miles of fence posts in South Texas that was ultimately built and largely funded by Fisher Industries, which has received about $2 billion in funding for wall contracts. Tommy Fisher, CEO, didn’t respond to calls for comment.
Trump recently criticized that section of wall after it showed signs of erosion, saying it was “only done to make me look bad,” even though it was built by his supporters.
Bannon led the conservative Breitbart News before being tapped to serve as chief executive officer of Trump’s campaign in its critical final months, when he pushed a scorched earth strategy that included highlighting the stories of former President Bill Clinton’s accusers. After the election, he served as chief strategist during the turbulent early months of Trump’s administration.
The blunt-spoken, combative Bannon was the voice of a nationalistic, outsider conservatism, and he pushed Trump to follow through on some of his most contentious campaign promises, including his travel ban on several majority-Muslim countries. But Bannon also clashed with other top advisers, and his high profile sometimes irked Trump. He was pushed out in August 2017.
Bannon, who served in the Navy and worked as an investment banker at Goldman Sachs before becoming a Hollywood producer, has been hosting a pro-Trump podcast called “War Room” that began during the president’s impeachment proceedings and has continued during the pandemic.
A day before the indictment was unsealed, Kolfage was a featured guest on the show.
Trump quickly distanced himself from Bannon while claiming he knew nothing about the project and never believed in a privately financed barrier.
“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,” he told reporters at the White House, adding that he felt “very badly” about the situation.
An immigration plan unveiled by Trump last year included a proposal to allow the public to donate toward his long-promised wall, as the Kolfage group had originally said was its mission before changing it to private construction of their own wall.
But Trump later denounced the project publicly, tweeting last month that he “disagreed with doing this very small (tiny) section of wall, in a tricky area, by a private group which raised money by ads” and claiming, “It was only done to make me look bad.”
Attorney General William Barr told The Associated Press he had been made aware of the investigation into Bannon months ago but did not say whether the president had been informed.
Dustin Stockton, who helped start the campaign and then left the project to work on the upcoming presidential election, said it seemed clear that prosecutors were “attacking political infrastructure that supports President Trump right before the election.” He was not charged in the case.
Benjamin Harnwell, who with Bannon launched an institute in Italy to train future populists, called the indictment “spurious” and evidence that the “forces of darkness” would stop at nothing to destroy Bannon.
Long and Colvin reported from Washington. Associated Press writers Jennifer Peltz in New York; Nomaan Merchant in Northbrook, Illinois; Cedar Attanasio in Santa Fe, New Mexico; Dave Collins in Hartford, Connecticut; Mike Balsamo in Cleveland; Nicole Winfield in Rome and Michael Biesecker in Washington contributed to this report.
Colorado Sun staff writer Jesse Paul contributed to this report.