Stephen Bannon, a former top aide to President Donald Trump, and Brian Kolfage, the leader of the crowdfunded "We Build The Wall" effort, have been charged with conspiracy to commit wire fraud and money laundering, federal prosecutors said Thursday.
Bannon, Kolfage, and two other men "received hundreds of thousands of dollars in donor funds from We Build the Wall, which they each used in a manner inconsistent with the organization's public representations," Audrey Strauss, the Acting United States Attorney for the Southern District of New York, said.
Bannon, Kolfage, and the other two, Andrew Badolato and Timothy Shea, have all been arrested and are expected to appear in court on Thursday.
Kolfage, she said, "took for his personal use more than $350,000 in funds that donors had given to We Build the Wall, while Bannon, through a non-profit organization under his control ("Non-Profit-1"), received over $1 million from We Build the Wall, at least some of which Bannon used to cover hundreds of thousands of dollars in Bannon's personal expenses."
According to court documents, the four men used Bannon's non-profit and a shell company, along with fake invoices and vendor arrangements, to conceal the scheme. In a text message, Kolfage allegedly said the financial arrangement needed to stay "confidential" and on a "need to know" basis.
Suspicions about the fundraising campaign came quickly after it raised more than $17 million in its first week on GoFundMe, the documents state. GoFundMe suspended the campaign, saying its organizers would need to identify a legitimate nonprofit that the money was going to, or the funds would be returned to donors.
The men then turned the campaign into a 501(c)(4) nonprofit called "We Build the Wall Inc." to transfer the money to, and then continued fundraising.
Central to the campaign's claims were that its founder "will take no salary" and "will personally not take a penny of compensation from these donations," according to the court documents.
Kolfage even emailed donors asking them to buy coffee from another one of his companies, saying in a mass email that it was how "he keeps his family fed and a roof over their head."
In reality, Kolfage, Bannon, and the other two men were using the money to fund their lavish lifestyles.
Kolfage allegedly spent his money on "home renovations, payments toward a boat, a luxury SUV, a golf cart, jewelry, cosmetic surgery, personal tax payments, and credit card debt." Bannon and the other two spent on "travel, hotels, consumer goods, and personal credit card debts."
The four men found out that would potentially be subjected to a criminal investigation in October 2019, at which point they allegedly "took additional steps to conceal the fraudulent scheme." They started using encrypted messaging apps, and mentions on the website about Kolfage not financially benefiting from the campaign were removed and replaced with a line that "he would be paid a salary starting in January 2020."This is a breaking news story. Check back here for updates.