Ex-Trump aide Bannon charged in border wall fraud plot
NEW YORK — President Donald Trump’s former chief strategist, Steve Bannon, was pulled from a luxury yacht and arrested Thursday on allegations that he and three associates ripped off donors trying to fund a southern border wall, making him the latest in a long list of Trump allies to be charged with a crime.
The organizers of the “We Build The Wall” group portrayed themselves as eager to help the president build a “big, beautiful” barrier along the U.S.-Mexico border, as he promised during the 2016 campaign. They raised more than $25 million from thousands of donors and pledged that 100% of the money would be used for the project.
But according to the criminal charges unsealed Thursday, much of the money never made it to the wall. Instead, it was used to line the pockets of group members, including Mr. Bannon, who served in Mr. Trump’s White House and worked for his campaign. He allegedly took over $1 million, using some to secretly pay co-defendant Brian Kolfage, the founder of the project, and to cover hundreds of thousands of dollars in personal expenses.
Hours after his arrest, Mr. Bannon pleaded not guilty during an appearance in a Manhattan federal court. He is the latest addition to a startlingly long list of Trump associates who have been prosecuted, including his former campaign chair Paul Manafort, whom Mr. Bannon replaced; his longtime lawyer Michael Cohen; and his former national security adviser Michael Flynn.
Mr. 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.
Mr. Bannon was taken into custody at about 7 a.m. by the U.S. Postal Inspection Service on a 150-foot luxury yacht called Lady May, which was off the coast of Connecticut, authorities said.
At his hearing, Mr. Bannon appeared by video with his hands cuffed in front of him and a white mask covering most of his face. He rocked back and forth on a chair in a holding cell with his lawyers on the telephone. The magistrate judge approved Mr. Bannon’s release on $5 million bail, secured by $1.75 million in assets.
When he emerged from the courthouse, Mr. Bannon tore off his mask, smiled and waved to news cameras. As he went to a waiting vehicle, he shouted, “This entire fiasco is to stop people who want to build the wall.”
Neither Mr. Bannon, nor his spokesperson or attorney, responded to requests for comment Thursday. Mr. Kolfage did not respond either. Also charged were Andrew Badolato and Timothy Shea, the owner of an energy drink company called Winning Energy. The company’s cans feature a cartoon superhero image of Mr. Trump and claim to contain “12 oz. of liberal tears.” Mr. Shea appeared at a brief virtual hearing in Denver.
Other prominent members of the wall group included former Kansas Secretary of State Kris Kobach, its general counsel; Erik Prince, founder of the controversial security firm Blackwater; former Republican Rep. Tom Tancredo of Colorado; and former major league baseball pitcher Curt Schilling. They were not named in the indictment.
After the arrest, Mr. Trump quickly distanced himself from Mr. Bannon and the project.
“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.
According to the indictment, the defendants used fake invoices, another nonprofit and sham vendor arrangements to try to hide their efforts to siphon money. Under the arrangement, Mr. Bannon and his co-defendants allegedly paid Mr. Kolfage $100,000 up front and an additional $20,000 monthly, all while claiming they served as volunteers and that Mr. Kolfage was not paid.
The indictment said Mr. Kolfage “went so far as to send mass emails to his donors asking them to purchase coffee from his unrelated business, telling donors the coffee company was the only way he ‘keeps his family fed and a roof over their head.’ ”
Mr. Kolfage eventually spent some of the over $350,000 he received on home renovations, payments toward a boat, a luxury SUV, a golf cart, jewelry, cosmetic surgery, personal tax payments and credit card debt.
Charges included conspiracy to commit wire fraud and conspiracy to commit money laundering.