“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.