TAMPA — Two Florida men arrested Thursday and charged with fraud alongside conservative political strategist Steve Bannon have long court records of bankruptcy, tax liens and fraud accusations.
An unsealed indictment announced by the U.S. Justice Department accused Bannon, chairman of President Donald Trump’s 2016 campaign, of fleecing hundreds of thousands of donors in an online crowdfunding campaign called “We Build the Wall” that raised more than $25 million and was promoted by Donald Trump Jr.
Bannon and associates had assured donors that they wouldn’t receive any money in a volunteer effort.
“Those representations were false,” the Justice Department said in a statement from the acting U.S. attorney for the Southern District of New York, Audrey Strauss. The four allegedly used a shell company and fake invoices to skim more than $1 million from donations.
To some extent, the Build-the-Wall caper is a made-in-Florida scandal. Agriculture Commissioner Nikki Fried’s office started looking into “We Build the Wall, Inc.” in June 2019.
Fried’s office took interest in the nonprofit in response to consumer complaints and complaints referred to the agency by Florida’s Office of the Attorney General, including allegations of questionable use of collected funds, the organization only having one director on its board instead of the required three and filing false statements about the board.
Two Florida men faced magistrate hearings on Thursday: Brian Kolfage, of the Panhandle’s Miramar Beach, who ran the “We Build the Wall” group and is alleged to have pocketed more than $350,000 to fund a lavish lifestyle, and Andrew M. Badolato, a Sarasota-area venture capitalist long tied to Bannon.
Kolfage is alleged to have used the funds to pay for home renovations, a boat, a luxury sports utility vehicle, cosmetic surgery and to pay off credit card debt and personal tax payments.
Federal prosecutors seized a Land Rover Range Rover and a Jupiter Marine boat named Warfighter. Public records show that Kolfage and his wife registered a 40-foot Jupiter Marine boat in Florida in November 2019. In 2017, Kolfage also incorporated a non-profit entity in Nevada called Warfighter Fishing.
Kolfage incorporated WEBUILDTHEWALL, INC. in Florida on Dec. 28 2018, according to state records. Kolfage, another Florida man named Dustin Stockton and Kris Kobach, the former Kansas Attorney General and unsuccessful GOP nominee for governor, were all listed as directors of the organization in a 2019 filing with the Florida Department of Agriculture and Consumer Services.
The nonprofit group projected that it would take in $30 million in 2019, with $25 million coming from GoFundMe donations, and $55 million in 2020, with $50 million coming from GoFundMe donations, according to a filing with the department.
The group later told the department that it took in $30 million in revenue in 2019 and spent $21 million on administrative expenses, leaving it with a $9 million surplus.
Kolfage associate Stockton is also, according to his LinkedIn profile, a vice president of America First Medical, a firm formed by Kolfage a few months ago that has been criticized for selling masks that were in short supply when COVID-19 first broke out. Prosecutors Thursday asked for funds held by America First at two banks to be forfeited in connection with the Bannon case.
Stockton was a campaign strategist for Joe Arpaio, a former Arizona sheriff who this month lost a primary bid to recapture his old post. Arpaio became well known for his harsh treatment of immigrants and jail inmates, confining them in un-air conditioned tents that some likened to concentration camps. Stockton is also a former reporter for the conservative news site Breitbart, which Bannon used to head, and took to Twitter to say he had been raided by a SWAT team Thursday morning with a warrant to search his phone.
Kolfage, an Iraq war veteran and Purple Heart recipient, has also been accused by former employees of running fake news web sites and sued other veterans over online trolling that at least one veteran said was driven by his concerns that Kolfage had overstated his military experience.
The other alleged fraudster is Badolato, who has been involved in other ventures with Bannon and was charged alongside him on Thursday.
U.S. Marshals escorted Badolato into a Tampa courtroom Thursday afternoon. He sat at a defense table wearing a dark blue polo shirt and a medical mask.
U.S. Magistrate Judge Thomas Wilson advised him of his rights and asked if he could afford a lawyer.
“I’m working on that now, your honor,” Badolato said. “Difficult to do it today, but I’m working on it.”
The judge appointed a federal public defender to represent him.
Assistant U.S. Attorney Diego Novaes told the judge that the government would not seek to hold Badolato in jail pending trial. But the prosecutor asked for a set of release conditions, including that Badolato be restricted from traveling outside of Florida or the New York City area. He said federal agents had seized his passport documents and some firearms.
The judge also ordered that he is not to talk with the other defendants or to access any of the “We Build the Wall” funds.
His grown son, Billy Badolato, spoke briefly with reporters outside the courtroom. He said federal authorities raided his family’s home at 7 a.m. Thursday with guns drawn.
He declined to talk about the case. But he said he has met Bannon.
“He’s not around all the time, but he’s a good guy,” he said. “It’s all political.”
Timothy Shea, of Castle Rock, Co., was also arrested and charged with the same count of conspiracy to commit wire fraud. He is a real estate agent and owner of a company called Winning Energy that sells pro-Trump beverages, its cans claiming to contain “12 oz of Liberal Tears.” A Colorado television channel began investigating Shea in 2018 after noticing that the address listed on the GoFundMe page for the wall effort traced to a Castle Rock post office box.
Speaking to reporters at the White House on Thursday, President Trump distanced himself from his former White House adviser and campaign strategist and said he didn’t know the Floridians. He also said he’d long opposed privately funding the wall along the U.S.-Mexico border, a key campaign promise of his administration.
“When I read about it I didn’t like it. It sounded to me like showboating,” Trump said of the private instead of government effort to build a wall, adding that “I thought this was going to be an inferior wall.”
Of the co-indicted Florida men, Trump said, “I didn’t know of any of the other people either. … I don’t believe I ever met them.”
However, in a photo posted on on his Facebook on Feb. 24, 2019, Kolfage — a triple amputee wounded in Iraq in 2004 — poses with his wife Ashley alongside Eric Trump at the president’s Mar-a-Lago resort.
Kolfage contributed $25,000 in October 2019 to a political committee supporting Trump’s re-election campaign.
Badolato has a long public record of legal problems, including filings of Chapter 7 and Chapter 11 bankruptcies, and numerous large IRS tax liens. He and Bannon were board members of a pharmaceutical company called SinoFresh that nearly collapsed amid litigation between the parties.
Florida corporation records show Badolato has opened and closed numerous businesses and his personal website describes him as an accomplished entrepreneur, senior-level executive and venture capitalist.
A story by the Tampa Bay Times in March 2017 told of Bannon’s relationship with Badolato and how the two men were working on a film about Ronald Reagan. Later, Bannon opened a film company that shared Badolato’s office address to make a documentary about former GOP vice presidential candidate and ex-Alaska Gov. Sarah Palin.
On his personal website, Badolato touts his columns published in Breitbart, the conservative news website, stating that his data articles have been picked up by Drudge Report, the popular conservative website. His articles, said the site, “amassed over 40 million page views, 100,000 plus comments and more than 250,000 social media shares. Mr Badolato’s data articles have appeared in the Drudge report 6 times.”
Kobach has not been charged and is not referenced in the indictment. Kobach, who campaigned unsuccessfully for governor in Kansas in 2018 and U.S. Senate in 2020, has served as the group’s general counsel since early 2019. He has also featured prominently in its fundraising videos.
He repeatedly touted his involvement with the group during his Senate race. He said as recently as July 6 that he was working with We Build the Wall.
“There’s a lot of legal work in that because not only am I negotiating with landowners where we’re going to build the next privately funded section of wall, I’m also talking to the Department of Homeland Security and making sure our specifications are consistent with theirs,” Kobach said.
We Build the Wall is one of seven clients that paid Kobach’s law firm $5,000 or more since January of 2019, according to the financial disclosure form he filed with the U.S. Senate in May. He was not required to list the exact amount he received from each client, but the total income from his firm was listed as $444,000 from January of 2019 to May of 2020.
Kobach did not answer a phone call Thursday morning. The charges against the organization come just weeks after Kobach lost the Republican Senate primary to Rep. Roger Marshall by double digits.
Bryan Lowry of the Washington Bureau contributed to this report.