The leaders of a charity that collected donations nominally for the purpose of privately funding construction of a border wall between the U.S. and Mexico have been arrested on allegations that they used those donations to pay for personal expenses and luxury items.
Brian Kolfage, a disabled Iraq War veteran and prominent supporter of U.S. President Donald Trump; former Trump White House adviser Steve Bannon; Florida-based venture capitalist and Bannon associate Andrew Badolato; and Timothy Shea, who allegedly controlled a non-profit used in their fraud scheme; were arrested on Aug. 20, 2020. All four were indicted on charges related to defrauding donors of the We Build the Wall charity.
The defendants allegedly plotted to launder donor money through third-party non-profits and ultimately paid Kolfage $350,000 in donor money for sham “consulting” work from January to October in 2019. Kolfage allegedly used this money for home renovations, payments for a Jupiter Marine boat named “Warfighter,” a luxury SUV, a golf cart, cosmetic surgery, personal tax payments, and credit card debt, according to a grand jury indictment unsealed on the same day as the arrests.
In addition, Bannon, Badolato and Shea also took “hundreds of thousands of dollars in donor funds,” using the money for things like “travel, hotels, consumer goods, and personal credit card debts,” according to federal prosecutors from the U.S. Attorney’s Office in the Southern District of New York.
Prosecutors say, Kolfage, Bannon, and Badolato convinced donors that they wouldn’t take salaries, and that all money raised would go toward building the wall. But privately, they agreed to pay Kolfage $100,000 upfront, in addition to a salary of $20,000 a month.
The We Build the Wall effort was started by Kolfage as a fundraising effort on the crowdfunding platform GoFundMe in mid-December 2018, according to the indictment. Originally, the intent stated by Kolfage was to give the money raised to the federal government to fund border wall construction along the U.S.-Mexico border.
But it soon became clear that simply handing money to the federal government for wall construction wasn’t possible. In December 2018, GoFundMe suspended the campaign, which had by then raised $20 million, and warned the men that all the money would be refunded to donors unless they identified a legitimate non-profit to direct the funds into, according to prosecutors.
To remedy this, the men established in late December 2018 the Florida-based 501(c)4 non-profit organization We Build The Wall, Inc. They then requested the transfer of funds from GoFundMe to the non-profit, at which point GoFundMe “offered full refunds to all donors and contacted all donors multiple times over a 90-day period before funds were released,” GoFundMe spokesperson Bobby Whitmore said.
Donors were given two options: they could receive a full refund, or they could choose to have their donations redirected to We Build The Wall, Inc.
“If the donor did not opt in or respond to our outreach, they automatically received a full refund,” Whitmore said. “After donors had the opportunity to receive a full refund during the 90-day period, the funds were released to the organization in question.”
According to prosecutors, Kolfage, Bannon, and Badolato had to therefore “effectively re-raise” the money received from donors via GoFundMe by convincing them to “opt in” and allow their money to be transferred to the new non-profit.
To do so, prosecutors said, Kolfage, Bannon, and Badolato promised donors that 100% of the funds raised would be used for the border wall, and Kolfage would “not profit even a penny,” which was a promise repeatedly made in “donor solicitations, public statements, social media posts, and press appearances” by Kolfage and Bannon. They also touted the organization’s bylaws, which stated the same, according to the indictment.
Then, in January 2019, they changed the mission of the We Build the Wall effort, stating that the new goal was to construct the border wall privately, independent of the federal government.
Whitmore told us that “A substantial majority of donors” representing $14 million directed their donations to the new organization, while the remaining $6 million was returned to donors who either requested refunds or didn’t respond to GoFundMe’s outreach.
“Donors took notice of this core narrative,” that Kolfage would take no salary and all money would be used for wall construction, the indictment states.
“Some of those donors wrote directly to Kolfage that they did not have a lot of money and were skeptical about online fundraising campaigns, but they were giving what they could because they trusted Kolfage would keep his word about how their donations would be spent,” said the indictment. We Build the Wall ultimately raised more than $25 million in donations between January 2019 and October 2019.
We reached out to We Build the Wall spokesperson Dustin Stockton, who directed us to a brief statement posted to the pro-Trump website America First Projects, in which he stated that his RV was raided by federal agents on the morning of Aug. 20, 2020, while he and Jennifer Lawrence, the organization’s communications director, were traveling through Nevada. The agents took their cell phones and served them with subpoenas to appear before the grand jury in New York.
“Jen and I have no comment on the specifics contained in the indictment and will only say that we intend to comply with the court’s order,” Stockton wrote. “Jen and I would like to commend the officers who executed the warrant for their fair and reasonable treatment of us under the circumstance.”
We reached out to Kolfage via email and Badolato through his personal website, but haven’t heard back from either of them. Our attempt to reach Shea through an energy drink business he runs was unsuccessful.
James Margolin, spokesman for the U.S. Attorney’s Office, Southern District of New York, told us by email that Kolfage, Badolato, and Shea are set for arraignment on Aug. 31, 2020, while Bannon has already plead not guilty. None of the defendants are currently in custody. Bannon was released on $5 million bond.
Snopes has reported on We Build the Wall before. In May 2019, Stockton told Snopes, “People don’t have to like or support our project, but the accusations that Brian (Kolfage) or anyone is using our donors’ money for anything other than securing our border is really frustrating because we have gone above and beyond to make sure that isn’t the case.”
To prove that point, Stockton at that time sent Snopes the organization’s bylaws which stated Kolfage and the other We Build the Wall directors wouldn’t be paid.
That 2019 Snopes story was prompted by reader inquiries about an article penned by Florida-based journalist and mortgage broker Grant Stern, who reported on May 12, 2019, that a source had told him they believed money had been diverted from the We Build the Wall fundraiser to pay for Kolfage’s “million-dollar yacht and high-flying lifestyle,” in reference to a Jupiter Marine boat pictured on Kolfage’s Instagram account.
At that time, we reached out to Kolfage with a list of questions about the vessel. We asked how much it cost and how the boat was paid for, to which Kolfage responded, “The boat cost was $675,000, I paid for most of it upfront after selling my previous boat.”
We asked whether any funds from the We Build the Wall GoFundMe were used to pay for anything associated with the boat. Kolfage responded:
No. To ensure proper accounting and transparency, WeBuildTheWall’s has adopted bylaws that make the use of funds for any private use by Brian Kolfage or any other person associated with the group impossible. These governing rules include barring Brian Kolfage from taking a salary and the creation of finance and audit committees to ensure all spending is used towards the stated purpose of the organization, building segments of border wall.
When we asked Kolfage what his sources of income were, this was his response:
I’ve been an entrepreneur for many years, I have invested money into numerous businesses, and day trade on the stock market as well. After being wounded in Iraq and losing my limbs I was given about $100,000 from my [Department of Defense Servicemembers Group Life Insurance] life insurance program, rather than spending this I invested it in 2005. I also receive [Veterans Administration] disability compensation for the loss of my 3 limbs, this money doesn’t give me my legs back but it made it easier for me to be successful again in life not having to worry about working a full time job, I could focus on school and my education which by the time I graduated my $100,000 investment grew very large after 10 years. I was able to co found a coffee company, Military Grade Coffee co. which is a very successful brand and we are looking to now open up stores nationwide. I’ve been blessed in my life, and making smart choices with my money has given the financial freedom to afford things that I have today.
Stern told us that after publishing his story, Kolfage and company threatened him with libel litigation — a threat that never materialized in an actual lawsuit.
“I totally feel vindicated,” Stern told us in a phone interview.
He credited his experience working on charity boards and investigating fraud in the mortgage industry, stating that he saw fraudulent behavior associated with the wall charity “hidden in plain sight,” telling us, “They were making claims that appeared to be false in order to raise copious amounts of money.”
The Florida Department of Agriculture and Consumer Services, which regulates non-profits in the state, said in a statement that it launched an investigation in May 2019, prompted by consumer complaints. The investigation was then referred to the FBI. However, the state investigation remains active.