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Trial on We Build the Wall fraud kicks off for holdout defendant

Timothy Shea is accused of conspiring alongside conservative strategist Steve Bannon to line their pockets with the money people thought they were crowdfunding for construction of a wall on the U.S.-Mexico border.

MANHATTAN (CN) — Steve Bannon’s cohort in the We Build the Wall fundraising fraud appeared before a jury Tuesday morning for the start of his federal trial.

The We Build the Wall campaign to crowdfund a wall on the U.S.-Mexico border was spearheaded by Air Force veteran Brian Kolfage and Steve Bannon, the erstwhile chief White House strategist to former President Donald Trump. Along with two associates, Kolfage and Bannon were indicted in August 2020 on charges that they siphoned donors’ money from the organization for their personal use.

Twenty months later, just Timothy Shea of Castle Rock, Colorado, stood Tuesday morning in a courtroom on the 15th floor of the Southern District of New York to begin trial.

Bannon, the highest-profile figure in the scheme, escaped liability in the case when then-President Trump issued him a pardon on his last day in office, while Kolfage and co-defendant Andrew Badolato both pleaded guilty last month.

Shea is charged in a superseding indictment with three criminal counts: conspiracy to commit wire fraud, conspiracy to commit money laundering and falsification of records.

Prosecutors allege Shea operated a shell company, the intentionally “vague-sounding” Ranch Property Marketing and Management, to draft fake invoices and payment requests to funnel hundreds of thousands of dollars in We Build the Wall donation funds to himself and his partners in the scheme.

Brian Kolfage, founder of We Build the Wall Inc., speaks at a May 30, 2019, news conference in Sunland Park, N.M., where a privately funded wall is being constructed. Kolfage and former White House adviser Steve Bannon were arrested Thursday, Aug. 20, 2020, on charges that they, and two others, ripped off donors to the online fundraising scheme. (Mark Lambie/The El Paso Times via AP, File)

With Bannon 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 2018 Land Rover Range Rover, a golf cart, jewelry, cosmetic surgery and other assets.

Assistant U.S. Attorney Alison Moe recounted for jurors on Tuesday how the creators of We Build the Wall made public assurances to donors that 100% percent of donated funds would go to the building of a wall at the Southern border, and “not a penny” would go to Kolfage as the president of their non-profit company.

In reality, Moe continued, “Timothy Shea and his partners were working behind the scenes to steal money for themselves.”

“It was a coordinated scheme to steal money from the organization and pay kickbacks,” the prosecutor said in her 16-minute opening argument. “They were committing fraud, plain and simple.”

By 2019, Moe noted, Shea had gotten a tip that complaints from donors led authorities to begin investigating We Build the Wall. She said that’s when he drafted inflated invoices and signed backdated documents.

Shea’s defense attorney John Meringolo urged jurors to set aside their personal feelings and politics about erecting a border fence and look at the evidence he said will disprove the government’s shell-company theory.

We Build the Wall did build two walls along the Southern border, Meringolo said in his 24-minute opening argument.

“The Army Corps of Engineers said it couldn’t be done, or if it was going to get done it was going to cost $41 million and take two years. … Tim’s part of this team that builds the wall, whether you like it or not, they built this wall for $6 million,” he said. “So maybe we should hire them to do our roads in New York.

“I submit to you if it’s not a shell company, they’re not proving their case beyond a reasonable doubt, and that’s not guilty,” argued Meringolo, who has previously represented organized crime figures John “Junior” Gotti and reputed Philadelphia mob boss Joseph “Skinny Joey” Merlino.

Timothy Shea, the only the co-defendant who is going to trial on a criminal indictment for involvement in the We Build The Wall donation scheme, owns an energy drink company called Winning Energy whose cans bear a cartoon superhero image of Donald Trump and was marketed to the MAGA crowd as containing “ultra-hydrating liberal tears.” (Image via Courthouse News)

Shea owns an energy drink company called Winning Energy whose cans bear a cartoon superhero image of Trump. The beverage was marketed to the former president’s conservative patriot base as containing “ultra-hydrating liberal tears.”

Prosecutors contend that Shea misappropriated funds from We Build the Wall to operate Winning Energy.

Meringolo briefly donned a Winning Energy trucker hat in the courtroom during his opening argument on Tuesday morning to demonstrate that the energy drink was a real company, complete with canned beverages and apparel and “clearly not a shell company.”

In an April filing, Meringolo said he “intends to call Mr. Bannon as a witness” for Shea’s defense.

Former Kansas Secretary of State Kris Kobach, an anti-immigration hardliner not named in the indictment but described as We Build the Wall’s general counsel on its website, is also expected to testify in the trial.

The trial is being presided over by Obama-appointed U.S. District Judge Analisa Torres.

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