Steve Ban­non, ‘We Build the Wall’ orga­niz­ers arrest­ed, charged with defraud­ing donors

Pub­lic state­ments that 100% of the mon­ey would be put toward the wall were false, pros­e­cu­tors say

Steve Ban­non, a for­mer advis­er to Pres­i­dent Trump, was among four sus­pects arrest­ed and indict­ed in con­nec­tion with an online fundrais­ing cam­paign that alleged­ly defraud­ed investors of hun­dreds of thou­sands of dollars.

Steve Ban­non, a for­mer advis­er to Pres­i­dent Trump, was among four sus­pects arrest­ed Thurs­day and indict­ed in con­nec­tion with an online fundrais­ing cam­paign that alleged­ly defraud­ed donors of hun­dreds of thou­sands of dol­lars, the Jus­tice Depart­ment announced.

Accord­ing to the indict­ment, Ban­non and co-defen­dant Bri­an Kolfage told the pub­lic that they were a “vol­un­teer orga­ni­za­tion” and that 100% of the mon­ey raised would go toward their stat­ed goal, which was to raise mon­ey for the fed­er­al gov­ern­ment to build a wall along the U.S.-Mexico border.

“Those rep­re­sen­ta­tions were false,” the indict­ment said. Pros­e­cu­tors claim that Kolfage, Ban­non, Andrew Badola­to and Tim­o­thy Shea took mon­ey for them­selves as the cam­paign raised upward of $25 mil­lion. The indict­ment alleges that Ban­non received more than $1 mil­lion through a non­prof­it that he then used for per­son­al expens­es and to pay Kolfage.

Pros­e­cu­tors say Ban­non and the oth­ers used the non­prof­it and a shell com­pa­ny to hide the pay­ments to Kolfage “by using fake invoic­es and sham ‘ven­dor’ arrange­ments,” as well as oth­er means of keep­ing the pay­ments qui­et. The indict­ment stat­ed that in order to raise funds, Kolfage and Ban­non “repeat­ed­ly and false­ly” told the pub­lic that Kolfage would “not take a pen­ny” in compensation.

Accord­ing to pros­e­cu­tors, Kolfage instruct­ed pay­ments to be made out to his spouse, and this was reflect­ed in a 1099 form the non-prof­it issued, say­ing the pay­ment was for “media.”

The cam­paign’s web­site said that all of the mon­ey raised would go to the gov­ern­ment for build­ing the wall, and that if they did not meet their fundrais­ing tar­get, they would “refund every sin­gle pen­ny,” accord­ing to the indictment.

With­in a week of Kolfage launch­ing the cam­paign in Decem­ber 2018, they raised rough­ly $17 mil­lion, pros­e­cu­tors said. Due to con­cerns over where the mon­ey was going, the crowd­fund­ing plat­form told Kolfage to iden­ti­fy a non­prof­it that the mon­ey would go to or the funds would be returned. At that point, pros­e­cu­tors said, Ban­non and Badola­to worked on cre­at­ing the non­prof­it We Build the Wall Inc.

The stat­ed goal was then changed to using the mon­ey to pri­vate­ly con­struct the wall, and past donors had to agree to have their mon­ey used for that pur­pose. They were assured that all of the mon­ey would go to wall con­struc­tion, and not to Kolfage or the orga­ni­za­tion’s board, the indict­ment said.

When Kolfage, Ban­non, and Badola­to learned in the fall of 2019 that the endeav­or was under fed­er­al inves­ti­ga­tion, they alleged­ly “took addi­tion­al steps to con­ceal the fraud­u­lent scheme,” the indict­ment said. This alleged­ly includ­ed using encrypt­ed mes­sag­ing appli­ca­tions, putting a stop to Kolfage’s salary pay­ments, and remov­ing text from the web­site say­ing that Kolfage would not be com­pen­sat­ed while adding a noti­fi­ca­tion that he would begin col­lect­ing a salary in Jan­u­ary 2020.

“As alleged, 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,” Act­ing U.S. Attor­ney Audrey Strauss said in a state­ment. “While repeat­ed­ly assur­ing donors that Bri­an Kolfage, the founder and pub­lic face of We Build the Wall, would not be paid a cent, the defen­dants secret­ly schemed to pass hun­dreds of thou­sands of dol­lars to Kolfage, which he used to fund his lav­ish lifestyle.”

Ban­non and the oth­er defen­dants were each charged with con­spir­a­cy to com­mit wire fraud and con­spir­a­cy to com­mit mon­ey laun­der­ing. Each count car­ries a max­i­mum penal­ty of 20 years in prison.

In addi­tion to Kolfage and Ban­non, the DOJ iden­ti­fied Badola­to and Shea as the oth­er sus­pects arrest­ed and indicted.

White House spokesper­son Alyssa Farah referred ques­tions on the indict­ments to the DOJ, say­ing it is “not a White House matter.”

Source:Fox News’ Mar­ta Dha­nis con­tributed to this report.