What to Know
- Former Trump campaign CEO and White House chief strategist Steve Bannon is among four people indicted for fraud in New York
- Federal prosecutors allege key figures behind the "We Build the Wall" campaign misused donations for personal expenses
- The campaign started as a GoFundMe in 2018 and raised $25 million from hundreds of thousands of donors
Former Trump campaign CEO and White House chief strategist Steve Bannon was indicted in New York on fraud charges related to a fundraising campaign to build a border wall, federal prosecutors said.
Bannon is among four people indicted for allegedly defrauding hundreds of thousands of donors to the online "We Build the Wall" campaign.
Manhattan federal prosecutors and the U.S. Postal Inspection Service allege that Bannon, campaign leader Brian Kolfage, Andrew Badolato and Timothy Shea "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."
The White House was quick to distance itself from Bannon and the wall effort, saying President Trump never approved of it and felt it was "only being done in order to showboat."
Trump himself, taking questions in the Oval Office during a meeting with the prime minister of Iraq, called Bannon's arrest "a very sad thing" but stressed he has not been dealing with his former adviser "for a very long period of time."
Bannon was arrested just after 7 a.m. Thursday by postal inspectors, with Coast Guard assistance, aboard the 152-foot yacht "Lady May" off the coast of Westbrook, Connecticut. That yacht has been owned by the Chinese real estate billionaire Guo Wengui, a business partner of Bannon's. (The Wall Street Journal reported Wednesday that federal and state authorities are investigating fundraising by a media company the two founded.)
Bannon appeared with his hands cuffed in front of him and a white mask covering most of his face at a brief court appearance Thursday afternoon, rocking back and forth in a holding cell chair where he appeared via video with his lawyers on the telephone.
He pleaded not guilty to all charges against him, and the government agreed to a $5 million bond package and travel restrictions — which include him not being allowed to use private jets or yachts. He was released later in the day.
In a brief comment made before getting into a black SUV following his court appearance in Manhattan, Bannon said "This entire fiasco is to stop people who want to build the wall." Neither his spokesperson nor attorney responded to requests for comment Thursday. Kolfage did not respond either.
"We Build the Wall" began as a GoFundMe campaign in late 2018, designed to raise money directly from the public to build a border wall in the face of congressional opposition. It was started by Kolfage, a military veteran, with support from Shea, the owner of an energy drink company called Winning Energy whose cans feature a cartoon superhero image of Trump and claim to contain "12 oz. of liberal tears." Bannon and Badolato later allegedly came in and took effective control of the campaign's daily operations.
While Kolfage publicly guaranteed that he would "not take a penny in salary or compensation," and that 100 percent of funds raised would go toward the wall, the indictment alleges he actually took more than $350,000 for personal use and took steps to conceal it.
A non-profit controlled by Bannon received another $1 million of the money, some of which went to cover various of his personal expenses, the government alleges. It was not immediately clear what personal expenses Bannon allegedly paid off with the donated money.
After finding out last October that their fundraising campaign might be under federal investigation, the defendants took steps to hide their activity even further, including the use of encrypted messaging, the indictment says.
Just two days ago, Kolfage tweeted that he was taking the campaign off of GoFundMe and moving it to a different platform because of GoFundMe's purported support for the Black Lives Matter movement.
The four defendants each face one count of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering, each of which carries up to 20 years in prison.
Acting U.S. Attorney for the Southern District of New York Audrey Strauss said in a statement that Bannon and the others "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."
Strauss alleged the defendants "secretly schemed to pass hundreds of thousands of dollars to Kolfage, which he used to fund his lavish lifestyle."
Trump Associates Charged, Convicted or Sentenced
Bannon becomes the second Trump 2016 campaign leader to face criminal charges. Former campaign chairman Paul Manafort, who Bannon replaced, was convicted of unrelated fraud charges in 2018. A number of other close Trump associates -- including former personal attorney Michael Cohen, long-time confidante Roger Stone and former National Security Adviser Michael Flynn -- have also been convicted of or pleaded guilty to criminal charges.
It was a difficult morning for the president in New York -- only minutes after Bannon was indicted, a federal judge rejected an attempt by the president to block the Manhattan district attorney from subpoenaing his tax records.
Read the indictment below or click here to open in a browser window.
