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'OGs' for Trump with Tucson ties indicted for 'private border wall' fraud

Ex-White House advisor Stephen Bannon & wounded Air Force vet Brian Kolfage charged with taking donations for luxuries, personal expenses

Four members of "We Build the Wall," a group that raised millions of dollars to build privately funded walls along the U.S.-Mexico border, have been indicted for conspiracy to commit wire fraud, including wounded Air Force veteran and former Tucsonan Brian Kolfage and ousted White House advisor Stephen Bannon.

They plotted to line their own pockets, buying a speedboat, luxury SUV, jewelry and paying for cosmetic surgery, authorities said.

Kolfage, Bannon and two other men were arrested Thursday morning and charged with "defrauding hundreds of thousands of donors," through their online crowdfunding effort, which raised $25 million to build private border barriers across the Southwest. 

The group "Well Build the Wall" was created out a GoFundMe initiated by Kolfage, a former Southern Arizona resident, who launched an effort to raise $1 billion to build private border walls in Arizona and Texas. However, after raising $25 million for the effort through private donations, the group built a single half-mile structure of 18-foot high fencing on private land just outside of Sunland Park, N.M., at a cost of about $7.5 million, Kolfage told a CBS News affiliate. 

Federal authorities also arrested financier Andrew Badolato and Timothy Shea, the acting U.S. Attorney for the Southern District of New York, Audrey Strauss and Philip R. Bartlett, the Inspector-in-Charge of the New York Field Office of the United States Postal Inspection Service, announced Thursday. All four are 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, said Strauss. 

The indictment describes a plan to give $350,000 to Kolfage in a series of payments throughout 2019, while Bannon received $1 million, including funds that were then shifted to Kolfage, while some of its was used to pay some of Bannon's personal expenses, including travel and and hotels. Kolfage spent the money on home renovations, a luxury SUV, a golf cart, cosmetic surgery, and paid his taxes and credit card debt, the indictment alleges.

In February 2019, Bannon and Kolfage headlined an event in Sahuarita, intended to launch the crowdfunding effort, with the goal of raising $1 billion to buy land and build a private border wall. However, even after a 90-minute presentation by seven members of the group's board the plan remained short on details. Along with Bannon and Kolfage, the event included former U.S. Rep. Tom Tancredo; Brandon Darby, a journalist for Breitbart; and Kris Kobach, the former Kansas secretary of state who was listed as We Build the Wall's general counsel. 

During that event, Bannon called himself and Kobach and Kolfage, "MAGA original gangsters" and called President Donald Trump a "man of action" and predicted that Trump would use his emergency powers to begin building a wall on the southern border using the U.S. military.

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Alleged scheme tied to 2 with Tucson connections

Kolfage — a former Southern Arizona resident who was once a supporter of Democrat Gabrielle Giffords in her runs for Congress — launched a GoFundMe in December 2018 called We the People We Build the Wall, with the idea to raise the $1 billion, which would be handed over to the U.S. Treasury. 

Kolfage, a triple amputee, first came into the public eye in 2012, when he was invited to be a guest of then-U.S. Rep. Giffords during President Obama's State of the Union address. 

Kolfage was wounded during his second deployment to Iraq in 2004 when Balad Air Base came under mortar attack, and he lost both legs and an arm. Kolfage had served on Giffords' Veteran Advisory Council, and was an architecture student at the University of Arizona. 

Calling the border "porous," Kolfage said that he wanted to raise the money because " I refuse to allow our broken political system to leave my family and my country vulnerable to attack." Kolfage raised about $20 million in less than a month, drawing national attention.

Kolfage and Bannon capitalized on donors "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 said. "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," she said. 

"The defendants allegedly engaged in fraud when they misrepresented the true use of donated funds," said Philip R. Bartlett, Inspector-in-Charge with the U.S. Post Office. "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."

"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," Bartlett said. 

While the wall was under construction, Bannon and others used the effort as a kind of telethon to raise money, and included videos of the blustering "Foreman" Mike Furey, who described the project often while sweltering under the mid-day sun. 

Bannon has his own connection to the Tucson-area. 

Long before serving as a White House strategist, Bannon was tapped to help manage Space Biosphere Ventures, the private company that built and maintained Biosphere 2 in Oracle, just north of Tucson. Bannon's two-year tenure was marked by a series of troubles, including a mutiny when researchers forced open doors and broke seals, letting outside air into the closed-dome experiment, and a subsequent lawsuit in which Space Biosphere Ventures was forced to pay $600,000 over statements Bannon made to one of the researchers.

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Funds 'misappropriated for personal benefit'

While Kolfage repeatedly said that "100 percent" of donated funds would be used to build a wall, the four men "worked together to misappropriate hundreds of thousands of dollars of those funds for their own personal benefit." 

According to the indictment, in spite of a core promise that all the money would go to the wall, instead the four men reached an agreement that would "covertly" pay Kolfage $100,000 upfront and $20,000 per month. To hide Kolfage's new salary, the group set up a non-profit to funnel the funds from We Build the Wall to Kolfage, according to text messages between the men. 

This included payments made to Kolfage's wife, which were marked as payments for "media." As Shea put it, in text messages beginning in March 2019, they would use a shell company to "falsely describe the payments" to Kolfage as "social media." 

In total, from January 2019 to October 2019, Kolfage received $350,000 in donor funds from We Build the Wall, passed through a web of shell companies and a non-profit at the "direction" and "assistance" of Bannon, Badolato, and Shea, according to the indictment. 

Bannon also received about $1 million from We Build the Wall, and "while some of that money was used to pay Kolfage," he also used a "substantial portion" of donor funds for "personal uses and expenses unrelated to We Build the Wall," federal prosecutors wrote. Once they released they were under investigation, the quartet began using encrypted messaging apps, and they changed the group's website to remove claims that Kolfage was not taking a salary, instead stating that he would be paid in January 2020. Kolfage also stopped receiving funds in January, federal officials said. 

Included in the indictment was a series of funds and vehicles seized as part of the indictment. Among the accounts were three listed as for WeBuildtheWall, Inc. as well as Freedom Daily, America First Medical, and White Knights & Vultures LLC. Officials also seized a 2019 Jupiter Marine boat named "Warfighter" and a 2018 Range Rover. 

The case is being handled by the Office’s Public Corruption Unit. Assistant United States Attorneys Nicolas Roos, Alison G. Moe, and Robert B. Sobelman are in charge of the prosecution.

GoFundMe fails, switch to private nonprofit

Ultimately, the group raised $20.6 million from more than 325,000 donors, the group said. However, because the group was far short of its goal and Kolfage had changed the direction of the funding, switching from giving the money directly to the federal government to a private foundation, GoFundMe refunded the money. Kolfage told donors they could redirect their money a new "501(c)(4) non-profit Florida corporation named 'We Build the Wall, Inc.'"

Kolfage said last year that his plan was not a stunt, but rather he created the original GoFundMe out of "frustration."

"I'm a citizen, I'm nothing more than a citizen, and I feel invested in this country—I lost my limbs for this country—it's not a stunt," he said. "I have two children, 5 and 3, and I couldn't handle it if something were to happen to them. That's why this not a stunt, we're doing it for people, to protect people."

"There's too many lives that have been lost," Kolfage said. "We have 2,000 miles of open border, the cartels are very adaptable and we need to secure the entire border," he said.

Kolfage said his effort would include Arizona, but as of yet, only two private-wall projects have been completed both in Texas. As Kobach put it in Feb. 2019 the group said that it wanted to build walls in Arizona, but that the lack of private property along the border makes it more difficult.

"The issue with Arizona is that there are very few private property land-owners in the state, so we can't touch it, so what we're doing is private property, and we have narrowed it down to a select few," said Kobach.

Around 67 percent of the border runs along private land, mostly in Texas. And, in Arizona, of the 211 miles of border in the Tucson Sector, about 80 percent has some kind of barrier, including modern pedestrian fencing and vehicle barriers, as well as "legacy" fencing.

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Paul Ingram/TucsonSentinel.com

Stephen Bannon, Kris Kobach, and Brian Kolfage during an event in Sahuarita, Ariz., in Feb. 2019.

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