Steve Bannon arrested and charged with fraud over
border wall campaign
Bannon and three others allegedly defrauded hundreds
of thousands of donors in connection with ‘We Build the Wall’
Victoria
Bekiempis and agencies
Thu 20 Aug
2020 14.57 BSTLast modified on Thu 20 Aug 2020 17.17 BST
Former
Trump campaign manager Steve Bannon was arrested Thursday in New York for his
alleged role in skimming donations from “We Build the Wall”, an online
fundraising campaign for the US president’s controversial border wall with
Mexico, officials said.
Using a
non-profit organization that he controlled, Bannon “received over $1m from We
Build the Wall, at least some of which Bannon used to cover hundreds of
thousands of dollars in [his] personal expenses”, federal prosecutors in
Manhattan said.
Three other
men, Brian Kolfage, Andrew Badolato and Timothy Shea, were also arrested in
this alleged scheme to defraud the non-profit, which authorities said raised
more than $25m.
The
charges, made by the Department of Justice’s southern district of New York
(SDNY), were contained in an indictment unsealed in Manhattan federal court.
Federal
prosecutors alleged that Bannon and three others “orchestrated a scheme to
defraud hundreds of thousands of donors”.
According
to the indictment, Bannon promised that 100% of the donated money would be used
for the project.
But it
alleged they faked invoices and sham “vendor” arrangements, among other ways,
to hide what was really happening.
The men are
facing one count each of conspiracy to commit wire fraud, and one count of
conspiracy to commit money laundering. Each count has a maximum prison sentence
of 20 years.
Bannon was
chief executive officer of Trump’s election campaign in its final months in
2016 and later served as the president’s chief strategist for seven months
during the turbulent early phase of the administration. He was fired as a top
adviser to the president in the summer of 2017, though recently Trump is said
to have been talking about him positively.
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.
He is
expected to appear later Thursday in Manhattan federal court.
The White
House press secretary, Kayleigh McEnany, distanced the president from the
scheme, saying he had “not been involved” with Bannon since the campaign and
the early part of the administration, and he did not know the other people.
She said:
“As everyone knows, President Trump has no involvement in this project and felt
it was only being done in order to showboat, and perhaps raise funds. President
Trump has previously and publicly stated the following: ‘I disagreed with doing
this very small (tiny) section of wall, in a tricky area, by a private group
which raised money by ads. It was only done to make me look bad, and perhaps it
now doesn’t even work.’”
It has been
previously reported by the New York Times that the the president had given the
private project his blessing.
In a
statement, acting US attorney Audrey Strauss said that the fund capitalized on
donors’ interest in building a border wall while instead funneling millions of
dollars to fund the “lavish lifestyle” of We Build the Wall founder and public
face Brian Kolfage.
Philip
Bartlett, inspector in charge, said: “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.”
The We
Build the Wall campaign started in 2018 as a GoFundMe by Kolfage, a military
veteran, who has described some people crossing the southern border without
documents as terrorists and drug traffickers and accused border wall critics as
being cartel collaborators. The campaign created a video posted on YouTube of
construction of metal barricades to attract anti-immigrant donors to the
campaign.
After
Kolfage brought Bannon and Badolato into the fundraising campaign,
“within
days”, the pair gained “significant control” of this fundraiser, such as its
messaging, donor outreach and finances, according to the indictment.
By spring
2019, the group had raised $22m out of its $1bn goal.
In a secret
deal with the others, Kolfage, it was alleged, “covertly took for his personal
use more than $350,000 in funds that donors had given to We Build the Wall”. To
hide this, the men “devised a scheme” to direct money siphoned from We Build
the Wall to Kolfage through a non-profit and a shell company that Shea
controlled, using bogus invoices and “sham” vendor agreements.
Kolfage
used the money for expenses, such as “home renovations, payments toward a boat,
a luxury SUV, a golf cart, jewelry, cosmetic surgery, personal tax payments and
credit card debt”. The other men each siphoned “hundreds of thousands” in
donations, it was said, which they used on personal expenses such as “travel,
hotels, consumer goods and personal credit card debts”.
When the
men realized that they might be under federal investigation in October 2019,
they tried hiding their scheme, using encrypted messaging apps.
Last year,
the campaign was seen by the Guardian building a private border wall in south
Texas despite a court injunction that ordered the work to be suspended.
The United
States Postal Inspection Service’s (USPIS) New York field office, which was a
partner on this investigation, praised the arrests. “No one is above the law,
not even a disabled war veteran or a millionaire political strategist,” said
Bartlett.
Trump’s
promise to build a wall across the 2,000-mile length of the US border with
Mexico was a central part of his campaign to be president and supporters
regularly chant “build the wall” at his rallies. Despite fierce opposition in
Congress from Democrats, the Trump administration has pledged to erect or
replace 450 to 500 miles by the end of 2020, at a cost of almost $18.5bn. While
meeting this target is in doubt, construction of the wall has continued in some
areas despite the coronavirus pandemic.
The White
House said on Thursday 300 miles of border wall had been built, adding: “Our
southern border is more secure than it has ever been.”
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