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Steven Bannon arrested and indicted for ‘multi-million wall fraud’

Former Donald Trump campaign strategist Steve Bannon was arrested aboard a superyacht owned by a Chinese national and charged Thursday with defrauding hundreds of thousands of people as part of a group pledging to use private donations to build a section of border wall. 

He and three others were charged in an indictment unsealed Thursday in Manhattan federal court.

At his hearing Thursday afternoon, Bannon,66, had his hands cuffed in front of him while a large, white mask covered most of his face. He was still wearing his distinctive two shirts. 

He rocked back and forward as he sat on a chair in a holding cell at Manhattan federal court, from where he appeared via video as his lawyers were on the telephone.

The magistrate judge approved Bannon’s release on $5 million bail, secured by $1.75 million in assets.  

The circumstances of his arrest – Bannon was on board the 150-foot yacht the Lady May owned by Chinese billionaire Guo Wengui in Long Island Sound, off the Connecticut coast, NBC News first reported – provided an odd twist that had a onetime top advisor to the president facing charges of helping swindle contributors by funneling charity donations to one of his partners and funding a ‘lavish’ lifestyle.

DailyMail.com obtained the last photographs of Bannon, hours before federal agents seized him in a dramatic arrest, checking his phone on the $35 million yacht just off Westbrook, CT.

The source who shot the photos said: ‘We saw the yacht come in on Tuesday night and the next day we saw a C-130 military plane circle over it, today [Thursday] there were more Coastguard military planes all around it.’ 

Bannon was arrested at 7.15am off the coast of Westbrook, CT. 

Chinese authorities have accused Wengui of fraud. He has been pictured with Bannon aboard the megayacht, and this summer they were behind an effort to declare a new ‘Federal State of New China’ that flew flags towed by planes around New York Harbor.

Bannon helped make confronting China a centerpiece of Donald Trump’s 2016 campaign, a posture the president has continued into his tenure in office. Another key tenet of that election was building a wall on the southern border that Trump said Mexico – not the U.S. government – would pay for.

The We Build The Wall scheme raised $25 million to fund its own barriers in Texas and New Mexico, some of which have been built. The group’s online appeal for funds included a picture of President Trump and a stamp that said ‘Trump Approved.’ His son Don Jr. visited one section in Sunland Park, New Mexico, in July 2019.

But prosecutors say it was a scam: donors’ cash was also funneled to its founder Brian Kolfage and to Bannon.

Bannon, who helped steer Trump’s campaign then joined him in the White House in 2017 as chief strategist only to be forced out, is accused of getting $1 million in the alleged scheme, spending hundreds of thousands of that on ‘expenses.

The group’s founder, Kolfage, is also accused of fraudulently pocketing funds. He claimed he did not get a cent from the scheme but instead got $100,000 up front and $20,000 a month salary, prosecutors allege, living a lavish lifestyle at Miramar Beach in the Florida panhandle.

Kolfage, an Iraq war veteran who had both legs amputated and lost his right arm in a rocket attack, was arrested at his home in Florida.

At the White House Trump denied knowing anything about the scheme and tried to distance himself from his former campaign manager.  

‘I feel very badly. I haven’t been dealing with him for a very long period of time,’ he said in the Oval Office, adding: ‘I haven’t been dealing with him at all. It’s a very sad thing by Mr. Bannon.’

‘He was involved in our campaign and for a small part of our administration.’ In fact Bannon was the campaign CEO for its last 88 days after the ousting of Paul Manafort – who is now a convicted felon himself –  and then was Trump’s ‘Chief Strategist,’ with a West Wing office close to the Oval Office.  

He also tried to distance himself from the scheme despite its ties to his inner circle, saying: ‘I don’t like that project. I thought it was being done for showboating reasons. It was something I very much thought was inappropriate to be doing.’  

The stunning indictment of a top former Trump advisor comes on Day Four of the Democratic convention, when Joe Biden is set to speak. 

‘No one needed a federal indictment to know that Steve Bannon is a fraud,’ said Biden deputy campaign manager Kate Bedingfield on a conference call with reporters.

Trump, she said, ‘has consistently used his office to enrich himself, his family and his cronies, so is it really any surprise that yet another one of the grifters he surrounded himself with and placed in the highest levels of government was just indicted? Sadly, it is not.’  

The investigation did not involve the FBI – but did involve the U.S. Postal Inspectors. It was led by prosecutors from the public corruption unit of the United States Attorney’s office in Southern News York – the same unit which charged Jeffrey Esptein and arrested Ghislaine Maxwell. 

The high-profile arrest raised immediate questions of whether main Justice Department officials were aware of the investigation into a one-time top advisor to the president.

Attorney General Bill Barr told the Associated Press he first learned of the probe several months ago but has not gotten regular briefings on the case. 

Prosecutors say the group promised donors it was a volunteer effort that would direct all funds toward a crash effort to construct wall without government red tape. In reality, say federal prosecutors in New York, the group’s founders siphoned off funds for themselves.

‘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,’ according to the indictment unsealed in the Southern District of New York Thursday morning.

‘While repeatedly assuring donors that Brian Kolfage, the founder and public face of We Build the Wall, would not be paid a cent, the defendants secretly schemed to pass hundreds of thousands of dollars to Kolfage, which he used to fund his lavish lifestyle,’ according to the indictment.

‘In particular, to induce donors to donate to the campaign, Kolfage repeatedly and falsely assured the public that he 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.’ 

The indictment states that Kolfage, 37, who lives in Miramar Beach, Florida, with his wife Ashley, 34,  ‘covertly took for his personal use more than $350,000 in funds that donors had given to We Build the Wall’ through a non-profit he controlled.

It states that Bannon, 66, who became wealthy through film investments, consulting, and formerly running the conservative Breitbart website, ‘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.’

Postal Inspector-in-Charge Philip R. Bartlett: ‘As alleged, not only did they lie to donors, they schemed to hide their misappropriation of funds by creating sham invoices and accounts to launder donations and cover up their crimes, showing no regard for the law or the truth.’

The indictment says the alleged fraudsters used a non-profit and a shell company controlled by Kolfage.

They used fake invoices, sham vendors as part of the effort, keeping the system ‘confidential’ and ‘need to know,’ according to the indictment, which quotes from a Kolfage email. 

Also indicted are Andrew Badolato of Florida and Timothy Shea of Colorado.

According to financial disclosures when he joined the White House staff, Bannon was worth between $10 million and $48 million in 2017, with most of the value in his consulting firm, Bannon Strategic Advisors. 

Trump fired Bannon in Agust 2017 after the adviser publicly disagreed with the administration’s North Korea policy. Trump later said Bannon had ‘lost his mind.’

But more recently Bannon has been an influential Trump world voice, appearing frequently on television and running a podcast where Trump aides are guests. There have been persistent reports of regular contact between the two men, but no known in person meetings.

Board members of We Build the Wall include Erik Prince, a the billionaire mercenary who is and brother of U.S. Education Secretary Betsy DeVos, former Kansas Secretary of State Kris Kobach – another Trump-world figure who led the failed inquiry into alleged voter fraud – and former Boston Red Sox pitcher Curt Schilling.  

Kolfage, a Purple Heart triple amputee veteran behind the effort, pushed back at critics after he was accused in public of using funds to fund a lavish lifestyle – which included flying in private jets and buying a $600,000 boat.

He says he bought the vessel a year before the $20 million GoFundMe campaign for the wall. Kolfage was wounded during the Iraq war in 2004.

Pushing back against online critics, We Build The Wall Inc. posted a video on Facebook that showed a factory producing steel bollards.

They wrote: ‘Just when we thought that the fake news media couldn’t get more ridiculously desperate, they’re now proving how low they’ll go by claiming that ‘We Build The Wall’ founder, Brian Kolfage, bought a yacht with the GoFundMe money

Just weeks ago, Trump tweeted out his dissatisfaction with the project after the group built a section of wall just 35 feet from the Rio Grande river on the U.S.-Mexico border, leading to concerns about erosion and flooding.

‘I disagreed with doing this very small (tiny) section of wall, in a tricky area, by a private group which raised money by ads,’ Trump tweeted. ‘It was only done to make me look bad, and [perhaps] it now doesn’t.’ 

The explosive indictment comes weeks after Trump fired the U.S. attorney for SDNY in June. It was announced by Acting U.S. Attorney Audrey Strauss, who has stepped into the role after Trump failed in an effort to install his own preferred replacement.

It charges Bannon used the funds he took to secretly repay Kolfage and cover hundreds of thousands of dollars in personal expenses.

The group’s original documents posted publicly stated that ‘100 per cent’ of funds would go to the government for wall construction. After Bannon joined the effort, it shifted to building private wall sections.

The group ultimately had to go back to donors to get approval for the new arrangement, and promised them that Kolfage ‘will take no salary.’

Despite ‘numerous public statements’ that Kolfage wouldn’t get paid, the men leading the group reached a ‘secret agreement’ where Kolfage got $100,000 ‘up front’ and ’20 [per] month.’

They ‘schemed’ to pass the payments ‘indirectly’ through third parties due to the prior pledge.

An email from Bannon stated that there would be ‘no deals I don’t approve’ from a non-profit he set up that was used to make the payments, which then went forward at $20,000 per month.

To conceal the payments, Kolfage directed Badolato that payments ‘should be made to Kolfage’s spouse,’ according to the indictment. The non-profit issued a 1099 form that nonprofits file with the IRS stating that it had paid Kolfage’s spouse for ‘media.’ That was a reference to Kolfage’s wife Ashley, 34.

 

Steve Bannon, who was arrested on a boat in the Long Island Sound Thursday, helped conceive Donald Trump’s populist campaign message – only to fall out of favor and get indicted for allegedly pocketing thousands from fervent believers in a border wall.

His fall now is criminal – but he had already crashed out of the White House after falling foul of Jared Kushner and Ivanka Trump, with the internecine feud ending in his abrupt departure in August 2017 which left him on the outer fringes of Trump-world

Bannon, now 66, was a shadowy and influential figure in Trump’s 2016 campaign, where the president systematically went after his primary opponents, clashed with Republican Party elites, inveighed against China and global trade, and framed a populist appeal to ‘forgotten’ Americans.

He had informally advised Trump before jumping on board from the conservative Breitbart website, which was backed by billionaire Rebekah Mercer.

Always disheveled, and often wearing two shirts at once, the recovering alcoholic, three-time married devout Catholic, and Navy veteran-turned Wall Street banker, brought intellectual heft and street-fighting instincts to first Breitbart, then the Trump campaign.

He installed himself at the center of it, as CEO, but that set up a clash which would prove fatal: the other power center was Jared Kushner and Ivanka Trump, who Bannon sneeringly named Javanka.

They co-operated for the 88 final days of the campaign with Bannon in charge, but the seeds of a toxic fall-out were sown because it was clear that in Trump-world, there were aides, and there was family. 

After his stunning election win over Hillary Clinton, Trump brought Bannon to the White House as his chief strategist, where sketched out early Trump agenda items on a white board.

He fought internecine battles and sometimes forged unexpected partnerships with Trump’s first chief of staff, Reince Preibus, during chaotic early days of the Trump administration.

But after it was revealed he had been cooperating with Michael Wolff in his scathing Trump takedown, ‘Fire and Fury,’ the president fired him.

Not only had Bannon consented to on-record interviews, he took aim at Trump family members, including Donald Trump Jr.

He called the infamous 2016 Trump Tower meeting about dirt on Hillary Clinton that was attended by Trump Jr., Paul Manafort, and Trump son-in-law Jared Kushner ‘treasonous’ and ‘unpatriotic.’ He predicted of authorities: ‘They’re going to crack Don Jr. like an egg’ – something which did not happen.

Wolff reported in 2018 that Bannon told investigators: ‘Even if you thought that this was not treasonous, or unpatriotic, or bad sh**, and I happen to think it’s all of that, you should have called the FBI immediately.’

Trump in characteristic fashion distanced himself with Bannon after throwing him overboard.

‘Steve Bannon has nothing to do with me or my presidency’ Trump said at the time. ‘When he was fired, he not only lost his job, he lost his mind.’

Bannon has eclectic interests and took an unusual path to power outside of the normal channels. He served seven years in the Navy, serving aboard a destroyer. He attended Harvard business school and landed a job at Goldman Sachs.

He sometimes appears disheveled in appearances, and cultivated a rough image, appearing unshaven and sporting wrinkled jackets.

In one of his best early bets, he helped talk a firm during a purchase into taking a percentage of ‘Seinfeld’ earnings, earning his own percentage on reruns.

He co-founded Breitbart News, calling it ‘the platform for the alt-righ,’ and helped use it to blast political enemies like the Clintons while building up conservatives.

He also delved into Hollywood filmmaking and made a documentary about Ronald Reagan.

On the campaign, he had the unusual title of Chief Executive Officer, which reflected his role as a strategizer who sought to develop a candidacy based on historical currents he perceived.

After he was out at the White House, Bannon was subpoenaed by Special Counsel Robert Mueller’s investigators who were probing Trump campaign contacts with Russians.

He reportedly met with them for 20 hours, speaking on multiple occasions, and his assessments are reflected in the Mueller report.

Trump minimized his contact with Bannon in comments at the White House Thursday, downplaying his time as an advisor with an office close to the Oval Office – just as he had when he fired him.

‘I haven’t been dealing with him for a very long period of time,’ Trump told reporters, when asked about the indictments – just the latest to bring one of his key associates into a legal quagmire.     

He is quoted in Wolff’s book calling first daughter Ivanka Trump ‘dumb as a brick.’

He took a public shot at Ivanka during his ill-fated effort to back Judge Roy Moore in the Alabama Senate race, even after Moore was accused of preying on teenage girls as an older man.

‘There’s a special place in hell for Republicans who should know better,’ Bannon said after having left the White House and crusading for outsider candidates.

Ivana had said earlier: ‘There’s a special place in hell for people who prey on children’ in a shot at Moore, who ultimately lost the race.

Trump had called Bannon a ‘good person’ when he left the White House.

Bob Woodward’s Trump White House book: ‘Fear: Trump in the White House,’ contains an account of an angry clash between Bannon and Ivanka after an alleged end-run around Priebus.

‘You’re a goddamn staffer!’ Bannon screamed at her, writes Woodward. ‘You walk around this place and act like you’re in charge, and you’re not. You’re on staff!’

She retorted: ‘I’m not a staffer! I’ll never be a staffer. I’m the first daughter.’

He also clashed with Kushner, and on CBS ’60 Minutes’in 2017 called for Jared and Ivanka’s views to be ‘counterbalanced’ by ‘economic nationalists’ in the administration like Peter Navarro and Stephen Miller.

He blasted the power couple in a Vanity Fair interview in late 2017. ‘The railhead of all bad decisions is the same railhead: Javanka,’ he said.

He sneered at Kushner: ‘He doesn’t know anything about the hobbits or the deplorables,’ referencing terms adopted by Trump’s fervent base of support. 

The Iraq veteran charged along with Steve Bannon and two others with stealing money from the We Build The Wall GoFundMe account spent $350,000 on boats, an SUV, plastic surgery, jewelry, home renovations and credit card debt, prosecutors claim. 

Prosecutors allege that Brian Kolfage, a triple amputee and celebrated war veteran, was the main beneficiary of the scheme.  

In 2018, Kolfage set up the GoFundMe account in support of President Trump and to prove the nation’s appetite for a border wall between the US and Mexico. 

It was inundated with donations from Republicans and had collected more than $20million by December that year. GoFundMe became suspicious of where the money was going and warned Kolfage to donate it to a legitimate charity or refund everyone who’d given to it. 

That is when, prosecutors say, Bannon, Timothy Shea and Andrew Badolato got involved. They used shell companies and a not-for-profit formed by Bannon to  launder the money back to Kolfage and keep some for themselves, it’s claimed. 

The fund would pay the shell companies, then they would deposit the money back into accounts held by Kolfage or his wife, marking the transactions down as for ‘media’, ‘consulting’ or ‘social media’, it is alleged. 

Despite claiming on the GoFundMe that he’d ‘never take a penny’ from the donations, the indictment alleges that Kolfage took a $20,000-a-month salary from it in addition to a one-off, $100,000 payment. In total, he took $350,000, it’s claimed.

Bannon allegedly took $1million from it – some of which he used to pay Kolfage, but some he allegedly kept and spent on hotels, travel and credit card debt. 

While Bannon is the most recognizable name in the indictment, Kolfage, 38, and his wife Ashley, 33, spent the money most enthusiastically. 

The pair live with their two children in a $290,000 home in Miramar, on the Florida panhandle. 

Ashley is active on Instagram and TikTok, where she shows off their weekends on boats and driving the golf cart prosecutors claim was paid for with the stolen donation money. 

They are flown around the country privately by charities, and spend the majority of the time on the beach. 

It is a luxurious lifestyle that they only reached after a devastating 2004 attack in  that claimed both his legs and his arm. 

Kolfage was stationed at the Balad Air Base in Iraq when on September 11, 2004, his limbs were shattered by a 107-mm mortar shell. 

He was flown to Germany, then back to Washington, where he underwent extensive surgeries.  

Once he’d been fitted with prosthetics, he moved to Arizona which is where he reconnected with Ashley -then a waitress at Chilli’s – having met her years earlier. 

The pair married in 2011 and welcomed two children years later. 

He lived quietly as a war hero until Trump entered the political world. Then, he became an activist. 

In December 2018, he launched the GoFundMe, saying at the time he’d grown sick of ‘too many illegals . . . taking advantage of the United States taxpayers’ and the ‘political games from both parties’. 

It took off on an unprecedented scale, collecting $20million. 

It propelled Kolfage into the sphere of media and politics. He frequently tweets in support of the president and against the liberal left, trashes COVID-19 as the ‘biggest scam the world has ever seen’ and fires back at anyone who questions the progress of his wall. 

The wall that his fund was paying for is not the same one the government is building and the president has distanced himself from Kolfage’s efforts. 

It hasn’t stopped him from pushing ahead with it, even as people questioned where the money was going last May, when there had been seemingly little progress. 

Kolfage came under fire for buying a $600,000 boat that he insisted he purchased before he ever launched the fundraising account. 

It’s unclear if it’s the same boat prosecutors referred to in their indictment, that he was making payments on.

When they aren’t enjoying that boat, the pair are visiting the wall with their children, often flying privately. 

They are also flown around by Carrington, a charity that builds homes for veterans. 

On TikTok, Ashley posts frequently from their home in a bikini, for her more than 300,000 followers. 

In recent videos, she is seen dancing on a table for her husband while he sits quietly. He rarely appears in the videos. 

She did not immediately return DailyMail.com’s inquiries on Thursday morning. 

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