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We Build the Wall fraud case ends in mistrial, jurors 'hopelessly deadlocked'

We Build the Wall fraud case ends in mistrial, jurors 'hopelessly deadlocked'

  • The border wall on the U.S.-Mexico border along the Geronimo Trail east of Douglas, Ariz.
    Paul Ingram/ The border wall on the U.S.-Mexico border along the Geronimo Trail east of Douglas, Ariz.

A federal judge declared a mistrial Tuesday in the criminal case against a Colorado businessman accused of laundering money from a bogus charity that milked about $25 million from private donors who thought they were funding the construction of former President Donald Trump’s border wall.

The panel is “hopelessly deadlocked,” U.S. District Judge Analisa Torres announced this afternoon of the jury that has been deliberating since last Tuesday — more than twice as long as the three-day duration of the trial for 51-year-old Timothy Shea that bookended the Memorial Day holiday weekend.

Shea, who owns a Trump-themed energy drink company called Winning Energy, stood trial alone, but he was charged in 2020 alongside three fellow co-founders of the group We Build the Wall: Trump political strategist Steve Bannon, Air Force veteran Brian Kolfage and venture capitalist Andrew Badolato.

From the beginning, We Build the Wall promised that 100% of funds raised would go toward construction of a wall on the U.S.-Mexico border. It quickly raised some $25 million in private donations on GoFundMe but built a mere 3 miles of fencing. The rest, according to charging papers, lined its founder’s pockets. Prosecutors said Bannon and Kolfage alone used more than $1 million in We Build the Wall donations to pay for a boat, a 2018 Land Rover Range Rover, a golf cart, jewelry, cosmetic surgery and other assets.

Kolfage and Badolato pleaded guilty in April 2022. Bannon, who was arrested off the eastern coast of Connecticut on a 150-foot yacht owned by Chinese billionaire Guo Wengui, meanwhile would circumvent liability in the case when Trump pardoned him on his last day in office in January 2021.

Shea faces three criminal counts — conspiracy to commit wire fraud, conspiracy to commit money laundering and falsification of records — each of which carries a maximum penalty of 20 years in prison.

Judge Torres announced the mistrial Tuesday shortly after jurors sent a note explaining that, despite going “to extreme depth and granular detail” on points of contention over the last couple days of deliberation, “it is abundantly clear that we are even further entrenched in our opposing views.”

“We cannot a reach a verdict on any of the three counts,” the jury wrote in their seventh and final note, after more than 30 hours of deliberation. Eight women and eight men made up the jury of New Yorkers who heard the case, 12 of them on the panel, plus four alternates.

Shea’s lawyer John Meringolo told reporters outside of the courtroom on Tuesday afternoon: “We respect all jury verdicts, good, bad or hung.”

Signs of cracks in the trial first began to emerge Thursday, three days into deliberations, when the jury sent a note to Judge Torres saying they were deadlocked 11-1. The panel requested that Torres call up alternate to replace a juror who they said had voiced anti-government bias and accused them all of being liberals.

Using bullet points to outline the juror’s behavior, the panel quoted this juror as saying things such as “government witch hunt” and accusing the government of venue shopping. Saying Shea “should have been tried in a Southern state,” the juror purportedly claimed that the government instead brought the case in New York City because they “knew people here vote differently.”

Judge Torres allowed the juror to remain on the panel and continue deliberating after privately questioning him in chambers.

The government’s case against Shea says he was the one who set up the shell corporations that funneled We Build the Wall donations to pay Kolfage a $20,000 monthly salary despite repeated assurances to donors that the triple amputee serving as We Build The Wall’s president would “not take a penny in salary or compensation.”

The money, according to the indictment, was funneled through Ranch Property Marketing and Management, a company that prosecutors said was given an intentionally “vague-sounding” name, to fabricated fake invoices and backdated payment requests.

Prosecutors showed evidence that Shea misappropriated $34,000 from We Build the Wall to buy 50,000 cans of his company’s Trump-themed beverage (“12 oz of liberal tears,” the packaging sneers). Though he and Kolfage “papered it as a loan,” the government questioned what kind of loan doesn’t come with interest. “No repayment, no collection, that’s how you know it wasn’t a real loan,” Assistant U.S. Attorney Nicolas Roos said during the government’s summation argument Tuesday.

The defendant ran Winning Energy with his wife, Amanda Shea, an ardent Trump conservative who was also listed as chief financial officer for We Build the Wall but not named in the indictment.

Shea’s attorney John Meringolo did not call any witnesses at trial, instead choosing to rest his brief defense on about a dozen exhibits entered into evidence, including a pixelated video of We Build The Wall board member Kris Kobach speaking at one of the border wall construction sites. Meringolo did not initially tell jurors that it was Kobach — not Shea — in the clip.

Meringolo’s capricious and seemingly improvised defense case hinged on his insistence that prosecutors had not proved the case beyond a reasonable doubt.

Following Judge Torres’ reading of a so-called “Allen charge” instructing the juror to continue deliberating toward a unanimous verdict, the jurors asked to pore through copies in government evidence of the trial’s voluminous bank records from 2018 through 2020.

Another jury note last Friday suggested an impasse on count three, falsification of records. This charge alleges that Shea and Kolfage backdated contracts in October 2019 to reflect reasons for payments from We Build the Wall to Shea and from Shea to Kolfage, “with the intent to impede, obstruct, or influence” a federal investigation into the scheme.

Suggesting the possibility of additional evidence “somewhere,” including earlier signed documents that the “prosecution did not search and find,” the jury note asked for clarity on whether it was a crime to backdate a contract to memorialize an earlier agreement.

CNN reported last week that the Manhattan district attorney’s office has issued subpoenas as part of criminal investigation into Bannon’s fundraising efforts, which could potentially lead to state charges against the onetime adviser pardoned by former President Trump.

While a presidential pardon can waive federal crimes but not state offenses, the Manhattan district attorney’s office previous attempt to charge former Trump campaign chair Paul Manafort for mortgage fraud was scuttled when state court Justice Maxwell Wiley threw the case out on double jeopardy grounds.

Manafort was convicted in August 2018 in a federal court in Virginia on eight counts of bank and tax fraud, failing to file a report for a foreign bank account and falsifying his income on federal tax returns.

Trump later pardoned Manafort in a slough of pardons issued in December 2020 to loyalists including Charles Kushner, father of Jared Kushner, and Roger Stone, the conservative political consultant and former business partner of Manafort.

Bannon is also facing a July federal trial in Washington on contempt charges after he refused to comply with a House committee subpoena connected to the mob of Trump supporters who stormed the U.S. Capitol on Jan. 6.

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