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Leaders of ‘We Build The Wall’ Crowdfunding Campaign Charged with Defrauding Donors; More Than $25 Million Was Raised Despite Red Flags

   Aug 21, 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,” said the Acting U.S. Attorney for the Southern District of New York (SDNY) in an August 20, 2020 press release announcing the unsealing of an indictment charging four individuals for their roles in connection with an online crowdfunding campaign known as “We Build the Wall” that raised more than $25 million. Those charged include triple-amputee war veteran Brian Kolfage, “the founder and public face of We Build the Wall,” and Steve Bannon, President Donald Trump’s former chief strategist. The indictment alleges that the defendants “orchestrated a scheme” causing We Build the Wall “to mislead donors, promising them repeatedly that ‘100 percent’ of the funds would be used for construction of a wall and that KOLFAGE, in particular, would take no salary or compensation from the new organization.” Instead, the defendants “worked together to misappropriate hundreds of thousands of dollars of those funds for their own personal benefit,” per the indictment.

The border wall campaign originally started in December 2018 on GoFundMe as “We the People Build the Wall” to raise funds to donate to the U.S. federal government for construction of a wall at the southern border with Mexico. As part of the campaign, Kolfage promised that he would “NEVER take a penny” and that “100% of fundraising” will only go towards the wall. After successfully raising more than $20 million, including approximately $17 million within the first week, GoFundMe suspended the campaign based on certain concerns, including the plan to give the money raised to the federal government, and warned Kolfage that he had to identify a legitimate nonprofit organization into which the funds raised could be transferred, or else GoFundMe would return the funds to those who had donated. Kolfage, Bannon, and Andrew Badolato, who is also a named defendant, proceeded by overseeing the creation of We Build the Wall, Inc., organizing it as a 501(c)(4) tax-exempt, social welfare organization, with the intent of transferring to it the millions raised on GoFundMe and using it as a platform to continue fundraising activities for the border wall, all according to the indictment. The mission of We Build the Wall, according to its website, is “to unite private citizens that share a common belief in providing national security for our Southern Border through the construction, administration and maintenance of physical barriers inhibiting illegal entry into the United States.”

According to the indictment: “To induce donors to donate to the campaign, KOLFAGE and BANNON…repeatedly and falsely assured the public that KOLFAGE would ‘not take a penny in salary or compensation’ and that ‘100% of the funds raised . . . will be used in the execution of our mission and purpose’ because, as BANNON publicly stated, ‘we’re a volunteer organization.’” “Those representations were false,” the indictment continues, stating: “In truth…the defendants, collectively 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 indictment asserts that Kolfage “covertly took” more than $350,000 in donated funds for his personal use, and Bannon received over $1 million (which was routed indirectly from We Build the Wall through a different nonprofit organization under Bannon’s control). Bannon allegedly used at least some of the $1 million to cover hundreds of thousands of dollars in personal expenses. By using shell companies, fake invoices, and sham “vendor” arrangements, among other devices, the defendants schemed to conceal payments to Kolfage from We Build the Wall’s funds, according to the indictment, which claims that Kolfage, working primarily with Bannon and Badolato, “reached a secret agreement” whereby Kolfage would be “covertly paid” $100,000 upfront and then $20,000 per month. The indictment claims that Kolfage used the allegedly misappropriated funds for home renovations, a luxury SUV, boat payments, a golf cart, jewelry, and cosmetic surgery, among other personal expenses, “to fund his lavish lifestyle.”

After the creation of We Build the Wall in January 2019, CharityWatch warned in reporting by The Daily Caller News Foundation that the new nonprofit founded by Kolfage raises a “huge red flag” and that donors would be taking a huge risk in blindly trusting Kolfage’s campaign claims. It is unfortunate that “huge red flag” did not deter the hundreds of thousands of donors that have allegedly been defrauded, according to the indictment, from giving millions of dollars to We Build the Wall.

Kolfage, Bannon, and the other defendants are each charged with one count of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering, each of which carries a maximum penalty of 20 years in prison, according to the SDNY press release. “This case should serve as a warning to other fraudsters that no one is above the law, not even a disabled war veteran or a millionaire political strategist,” said the Inspector-in-Charge of the New York Field Office of the U.S. Postal Inspection Service, who was part of the announcement of the unsealing of the indictment.