Tuesday, September 26, 2023
Courthouse News Service
Tuesday, September 26, 2023 | Back issues
Courthouse News Service Courthouse News Service

Border-Wall Group Linked to Fraud Can’t Unfreeze Donor Dollars

The Second Circuit sees no due-process violation in keeping ice on the money that Steve Bannon and others are accused of spending on themselves rather than on a fence securing the nation's southern border.

MANHATTAN (CN) — The general counsel to We Build the Wall lost his bid Monday to unfreeze the funds that the nonprofit is still collecting even after the government accused its founding members of siphoning donor money to pay for a boat, cosmetic surgery and other personal expenses. 

Steve Bannon, Air Force veteran Brian Kolfage and two associates were indicted last August, said to have defrauded the hundreds of thousands of people who joined their crowdfunding campaign to build Trump's long-promised wall on the U.S.-Mexico border. With the exception of Bannon, whom Trump pardoned on his final night in office, the defendants have all pleaded not guilty and are awaiting trial. 

The Justice Department quickly froze three of the organization’s bank accounts containing $1.4 million, claiming they were subject to forfeiture, but the group's general counsel Kris Kobach argued before the Second Circuit the group has a due-process right to access its funding.

A three-judge panel shut Kobach down on Monday, affirming the ruling by the Southern District of New York that We Build the Wall cannot contest a forfeiture before it occurs. 

“WBTW argues that its appeal falls within that category of injunction-like orders that are appealable under § 1292(a)(1) when the preliminary relief ‘effectively shuts down an ongoing business,’” the 3-page order states, abbreviating the name We Build the Wall. “However, WBTW acknowledges that it has continued to receive funds after the restraining order was issued, and the government does not contest its right to use these funds. Furthermore, WBTW remains able to transact certain business, as it has paid to lift a temporary administrative dissolution in Florida. WBTW cannot show that the restraining order has effectively shut down the business.”

The unsigned summary order came from U.S. Circuit Judges Rosemary S. Pooler and Raymond J. Lohier Jr., as well as U.S. District Judge Lewis A. Kaplan, sitting on the panel by designation.

During oral argument, Lohier, an Obama appointee, questioned whether We Build the Wall could be an innocent third party, despite its leaders’ alleged fraudulent activity. 

U.S. Attorney Robert Sobelman said that was impossible. “Kolfage was founder, president, and CEO,” he said. “He was able to steal money without anyone stepping in his way.”

A triple amputee, Brian Kolfage posted to Instagram this photo of him posing with ex-Kansas Secretary of State Kris Kobach, anti-immigration hardliner who served as general counsel of We Build the Wall. Kolfage was charged on Aug. 20, 2020, with taking money donated for the wall to instead line his pockets and purchase a boat he named Warfighter, as well as cosmetic surgery and a 2018 Land Rover Range Rover. (Image via Courthouse News)

We Build the Wall raised some $25 million in private donations but built just 3 miles of fencing along the border. According to the indictment, Kolfage and Bannon took more than $1 million to pay for cosmetic surgery, a Range Rover, a boat, a golf cart, jewelry, home renovations, among other lavish expenses. 

Sobelman said “the fraud was lying to the hundreds of thousands of donors saying the founders would get no compensation. So every dollar that came in, whether to build a wall or buy a boat, was fraudulently obtained.”

Kobach’s attorney Justin Weddle argued that the money in the accounts, raised to build the wall, could still be used to do so — and was never “obtained” by Kolfage or Bannon. 

The brief from Weddle meanwhile called the freeze a “nuclear weapon” that “is contrary to the plain terms of the applicable statutes, applicable case law, the Constitution, and common sense.” 

Sobelman argued that, with the trial scheduled for November, the government wasn’t making the organization wait for an unreasonable amount of him. He also said that the District Court had found probable cause to believe that the assets were forfeitable. 

Kobach came to national prominence both for his hardline anti-immigration views and his work as Kansas secretary of state to impose strict voter-identification rules. As late as 2016, Kobach was still raising questions about President Obama’s citizenship that were long debunked as baseless.

And while a federal judge sanctioned Kobach with remedial classes on the law, his positions earned him a brief stint as vice chair of President Trump’s Commission on Election Integrity. Before it was disbanded without issuing a single report, the group was founded to bolster Trump’s first-term claims of rampant voter fraud.

Kobach lost the 2018 Kansas governor’s race to Democrat Laura Kelly, and last year was defeated in a U.S. Senate run. 

Weddle did not respond to a request for comment on Monday. 

Follow Nina Pullano on Twitter.

Follow @NinaPullano
Categories / Appeals, Business, Criminal, Politics

Read the Top 8

Sign up for the Top 8, a roundup of the day's top stories delivered directly to your inbox Monday through Friday.