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Tuesday, June 25, 2024 | Back issues
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Sink or Swim for New Bannon Lawyer as Charity Fraud Case Marches On

Taking up Stephen Bannon’s defense some four months into the prosecution, a new attorney for the former White House adviser told a federal judge Thursday that he is still playing catch-up with the government on evidence production.

MANHATTAN (CN) — Taking up Stephen Bannon’s defense some four months into the prosecution, a new attorney for the former White House adviser told a federal judge Thursday that he is still playing catch-up with the government on evidence production. 

Robert Costello of the firm Davidoff Hutcher & Citron made the disclosure at a virtual hearing pushed back over several matters, including the withdrawal of Bannon’s last lawyer, Bill Burck at Quinn Emanuel — a move that U.S. District Judge Analisa Torres solidified today.

With Assistant U.S. Attorney Robert Sobelman reporting that a second “substantial” production of discovery materials should be ready within a few weeks, Torres gave attorneys for Bannon and his co-defendants until Feb. 22 to file any objections. 

Though he said he did not object to the date, “just to see where we are at that point in time,” Costello admitted here that he is “a little bit in the dark” when it comes to discovery, having not seen the first production. 

The prosecutor Sobelman noted that the government made a “very substantial” first production at three different times in early October, and some later in the month. 

Such production did not meet the court’s Sept. 29 deadline, but Sobelman attributed the delay to the time it took to acquire drives from defendants, then load and image them.

The hearing marked the first time since August when Bannon and a trio of men with whom he had teamed up to launch a nonprofit called We Build The Wall pleaded not guilty to defrauding donors. 

In just its first week, the crowdfunding campaign to create a small segment of a wall on the U.S.-Mexico border raised $17 million.

Bannon and the U.S. Air Force veteran who started the campaign, Brian Kolfage, publicly promised that every penny they raised would go to construction, but a 24-page indictment says Kolfage used donation money to buy a boat, a Range Rover and cosmetic surgery, while Bannon alone  pocketed more than $1 million. 

“Kolfage and Bannon ... exerted significant control over We Build the Wall,” according to the indictment, which quotes the men as having “repeatedly and falsely assured the public that Kolfage would ‘not take a penny in salary or compensation’ and that ‘100% of the funds raised … will be used in the execution of our mission and purpose’ because, as Bannon publicly stated, ‘we’re a volunteer organization.’” 

Bannon was on Chinese billionaire Guo Wengui’s 150-foot yacht, sailing off the coast of Connecticut, when he was arrested. His partners, venture capitalist Andy Badolato and Timothy Shea, were arrested on the same day in August. 

Brian Kolfage poses with his wife Ashley in this photo posted to Instagram, set on the Jupiter Marine boat that prosecutors say he bought with money to his charity We Build the Wall. (Photo via Courthouse News)

The government says the defendants own communications incriminate them. “Indeed, as Kolfage noted to Badolato in a text message exchange, ‘as far as [the public] knows no one is getting paid’ and ‘salaries will never be disclosed,’” the indictment states.

GoFundMe suspended the campaign weeks after the project began collecting donations, telling Kolfage to name a legitimate charity to which funds could be transferred, and threatening to return to donors the $20 million raised. 

Prosecutors say the nonprofit We Build the Wall Inc. was created around that time, and the campaign relaunched with Kolfage and Bannon using sham agreements to line their pockets. 

Kolfage allegedly used funds to buy himself a golf cart and jewelry, among other things, like his personal tax obligations, credit card debt and home renovations.

Bannon’s arrest led President Donald Trump to remark to White House reporters that he was not a fan of the charity.

“I don’t like that project,” Trump said in August. “I thought it was being done for showboating reasons.” 

The trial is set to begin on May 24, 2021.

Each defendant faces conspiracy charges that could carry a 40-year prison sentence. 

Earlier this week, Judge Torres denied Shea’s request to transfer his proceedings to Colorado, where he lives.  

Judge Torres also blocked a request by former Kansas Secretary of State Kris Kobach to access We Build the Wall funds unrelated to the purported scam, and unsealed the post-indictment restraining order that froze the nonprofit's bank accounts, which Kobach sought to modify. 

Torres declined, however, to unseal the government's application for the order. "This information, if disclosed, could hamper the investigation," the judge wrote. 

Shea and Badolato’s attorneys did not object at Thursday’s hearing to the judge’s designation of Feb. 22 as the date to file motions regarding discovery. Sobelman had trouble pinning down exactly when the government will produce the second batch of discovery material, given the “fairly extensive” processing that has to take place. 

In response, Judge Torres said, “I understand that it’s difficult, but just based on your past experience, do you think you’ll be done, say, by the end of January?” 

Costello remarked at the hearing that he hadn’t yet heard whether prosecutors had delivered so-called Brady material to the defendants — referring to evidence that could be exculpatory.

Saying it was the first he had heard the question from Costello, Sobelman declined to describe items in a public form but said “we’d be glad to have this discussion with Mr. Costello offline.” 

Torres said she would direct parties to have the conversation, then ended the hearing, saying, “I’d like to wish everyone happy holidays and good health.” 

Follow @NinaPullano
Categories / Criminal, Financial, Politics

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