MANHATTAN (CN) — Two men who promised investors that 100% of their donations would go toward building a wall on the U.S.-Mexico border pleaded guilty to fraud Thursday, setting themselves up for prison sentences while their more famous partner, Steve Bannon, walks free on a presidential pardon.
Appearing in the Southern District of New York this afternoon via remote videoconference, U.S. Air Force Iraq War veteran Brain Kolfage and Florida venture capitalist Andrew Badolato admitted that the money supposedly earmarked for wall construction instead lined their pockets.
Badolato, 57, told U.S. District Judge Analisa Torres he is “terribly, terribly sorry for what we did and humbly, respectfully beg the court for mercy.”
With Bannon himself calling their outfit a "volunteer organization," We Build the Wall raised some $25 million in private donations but built just 3 miles of fencing along the border. According to their indictment, Bannon and Kolfage alone used more than $1 million in We Build the Wall donations to pay for a boat, a luxury SUV, a golf cart, jewelry, cosmetic surgery and other assets. Badolato rounded out the scheme's ring alongside a fourth defendant, Timothy Shea, who is sticking to his not-guilty plea and is set to stand trial next month.
In court last year, the co-conspirators made an unsuccessful bid to regain access to their investors' frozen dollars, with members of the court expressing amazement that the overhanging criminal charges apparently did little to deter donations.
“People are still giving money after the indictments?” U.S. Circuit Judge Rosemary Pooler had asked at Second Circuit arguments last year. “That’s stunning to me.”
Kolfage, who is a triple amputee following injuries in the Iraq War, noted in a brief allocution Thursday that it was his “sole intent” when he launched the fundraiser online via GoFundMe that all of those funds collected would be used exclusively to build a wall. Initially he planned to give all the donated money to the government, but he that plan changed once he learned that it wouldn’t be possible to direct how the government spent the donations once the money changed hands.
Kolfage said he pivoted then to raising funds for private construction of the wall.
“In doing so, we induced initial donors to opt into the new project, in part, through the misrepresentation that I would I not profit from We Build the Wall Inc. or take salary or compensation,” said Kolfage, 39. “Despite our promises, together with others, I knowingly and willfully conspired to unlawfully receive money from the donations,” he told the judge. “I knew what I was doing was wrong and a crime.”
Kolfage and Badolato pleaded guilty to counts of conspiracy to commit wire fraud, but Kolfage also pleaded guilty to additional counts of making false tax statements and wire fraud, in connection with filing a false tax return from a separate superseding indictment transferred from the Northern District of Florida.
The maximum sentence for conspiracy to commit wire fraud is 20 years, but Kolfage and Badolato's plea agreements specify that they will not challenge sentences within an already agreed-upon range. The guidelines range for Kolfage is four to five years, and slightly less for Badolato — roughly 3 1/2 years to four years. The defendants will be free pending sentencing, set for Sept. 6
Attorneys for the holdout defendant indicated in court filings last week he intends to call Bannon to witness stand when Shea goes on trial, set to begin May 16.
Bannon escaped liability in the case when then-President Donald Trump issued him a pardon on his last day in office. The rappers Lil Wayne and Kodak Black were also part of that last-minute heap of clemency to more than 70 people, as were Republican fundraiser Elliot Broidy and former New York Observer editor Ken Kurson, a friend of Trump’s son-in-law Jared Kushner.
Trump previously pardoned a of longtime associates and loyalists including his former campaign chairman, Paul Manafort; Charles Kushner, the father of his son-in-law; his longtime friend and adviser Roger Stone; and his former national security adviser Michael Flynn.
At the time of Bannon's arrest in 2020, which occurred on a 150-foot yacht owned by Chinese billionaire Guo Wengu, Trump tried to distanced himself from his onetime adviser.
“I haven’t been dealing with him for a very long period of time,” Trump told White House reporters.
As for the fundraiser We Build the Wall, Trump noted: “I don’t like that project. I thought it was being done for showboating reasons.”
The Supreme Court ruled 5-4 in July 2020 to allow construction of Trump’s long-promised border wall to continue, one month after the Ninth Circuit had found the administration illegally circumvented Congress’ power of the purse by transferring $2.5 billion in Department of Defense funds to the border wall project.
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