Former Trump Advisor Steve Bannon Arrested and Charged With Fraud in Border Wall Scheme: Federal Prosecutors | Inside Edition

Former Trump Advisor Steve Bannon Arrested and Charged With Fraud in Border Wall Scheme: Federal Prosecutors

Steve Bannon in the Oval Office with President Trump.

Steve Bannon, a former top Trump advisor, was arrested and charged with fraud in border wall scheme, according to federal prosecutors.

Steve Bannon, the Trump administration's former chief strategist, was arrested Thursday and charged with fraud by federal prosecutors in an alleged crowdfunding scheme that raised $25 million to build a border wall.

Bannon and three others defrauded hundreds of thousands of donors to the "We Build the Wall" campaign by using funds for their personal benefit, according to an indictment unsealed Thursday.

The defendants raised millions “under the false pretense that all of that money would be spent on construction,” Audrey Strauss, the acting United States attorney in Manhattan, said in a statement Thursday.

Bannon, who helped orchestrate Trump's 2016 presidential campaign, hatched the plot to defraud donors to the build-the-wall campaign with three other men: Brian Kolfage, 38, an Air Force veteran from Florida, Andrew Badolato, 56, a Florida financier and Timothy Shea, 49, of  Colorado, according to federal prosecutors.

The fund-raising effort was supposed to benefit Trump's much-touted effort to build a wall on the U.S. border with Mexico.

Instead, federal prosecutors allege, hundreds of thousands of dollars went to Kolfage, who used the money for personal expenses, and to Bannon, who received $1 million via an unnamed nonprofit corporation.

"The defendants secretly schemed to pass hundreds of thousands of dollars to Kolfage, which he used to fund his lavish lifestyle," according to the U.S. Attorney's statement. Kolfage's purchases included a boat and cosmetic surgery, the indictment said.

“The defendants allegedly engaged in fraud when they misrepresented the true use of donated funds," the statement said. "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."

Each man was charged with one count of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering, prosecutors said. The counts carry a maximum penalty of 20 years in prison. 

Bannon pleaded not guilty later in the day, appearing in handcuffs and wearing a mask in New York federal court. He was released on $5 million bail. He was arrested at about 7 a.m. on a yacht off the coast of Connecticut, authorities said.

White House Press Secretary Kayleigh McEnany released a statement stressing that President Trump was not involved in the project while distancing the president from Bannon. 

Bannon, 66, the former head of conservative media outlet Breitbart News, served as a top White House adviser to the president in the first seven months of the Trump administration.