Air Force veteran and 1999 Kaimuki High graduate Brian Kolfage is accused with former presidential advisor Steve Bannon and others of defrauding hundreds of thousands of donors in connection with an online crowdfunding campaign known as “We Build the Wall” that raised more than $25 million, the Justice Department said Thursday.
“While repeatedly assuring donors that Brian Kolfage, the founder and public face of We Build the Wall, would not be paid a cent, the defendants secretly schemed to pass hundreds of thousands of dollars to Kolfage, which he used to fund his lavish lifestyle,” Acting U.S. Attorney Audrey Strauss said in a release.
Prosecutors allege that Kolfage and others conspired to secretly funnel money from the effort through a nonprofit and a shell company for personal use.
Kolfage, now 38, lost part of an arm and both legs in a rocket attack in Iraq in 2004. He lived on Oahu from about the seventh grade on and loved surfing. After graduation from Kaimuki High, he enlisted in the Air Force.
He was two weeks into his second deployment to Iraq when he heard a turbine noise as he walked from his tent at Balad Air Base to get some water. A 107 mm rocket exploded a few feet away, severing his right hand and taking both his legs.
The retired senior airman fought through a difficult recovery, studied architecture at the University of Arizona, became a motivational speaker and co-founded the Military Grade Coffee Co. He was one of the most severely wounded airmen to have survived the war.
In 2018 he was recognized and honored by the state House with a resolution for his service and sacrifice.
Kolfage, who then lived in Destin, Fla., with his wife, Ashley, and kids Paris and Beckham, said he would still come back to Hawaii once or twice a year because he likes it so much here.
From the start of We Build the Wall in January 2019 to around October 2019, Kolfage received more than $350,000 in donor funds — all passed indirectly at the direction of co-defendants Bannon, Andrew Badolato and Timothy Shea, according to the unsealed indictment.
Kolfage used the money to pay for personal expenses including home renovations, payments towards a boat, a luxury SUV, a golf cart, jewelry, cosmetic surgery, personal tax payments and credit card debt, the indictment said.
Starting in approximately December 2018, the four men and others “orchestrated a scheme” to defraud hundreds of thousands of donors to the We Build The Wall effort, the Justice Department said in a release.
“In particular, to induce donors to donate to the campaign, Kolfage repeatedly and falsely assured the public that he would ‘not take a penny in salary or compensation’ ” the release said. … “Those representations were false.”
Kolfage, Bannon, Badolato and Shea collectively received hundreds of thousands of donor funds from We Build the Wall which they used in a manner inconsistent with the organization’s public representations, the government said.
“In particular, Kolfage covertly took for his personal use more than $350,000 in funds that donors had given to We Build the Wall, while Bannon, through a non-profit organization under his control (“Non-Profit-1”), received over $1 million from We Build the Wall,” according to officials.
Badolato is an entrepreneur and venture capitalist who worked with Bannon on the nonprofit, which was founded by Bannon with the stated purpose of promoting “economic nationalism and American sovereignty,” the indictment said.
Shea had been involved in the early operations of a predecessor campaign to We Build the Wall, the government said.
Kolfage posted messages on social media promising that 100% of the funds raised would go to the southern border wall construction, adding, “I’m taking nothing! Zero,” according to the court filing.
The indictment said he went so far as to send mass emails to his donors asking them to purchase coffee from his business because that was the only way he kept his family fed and a roof over their head.
“Some of those donors wrote directly to Kolfage that they did not have a lot of money and were skeptical about online fundraising campaigns, but they were giving what they could because they trusted Kolfage would keep his word about how their donations would be spent,” prosecutors said.
Despite Kolfage’s numerous public statements that he was not taking a penny in compensation, the indictment said, within days of launching We Build the Wall, Kolfage, working primarily with Bannon and Badolato, reached a secret agreement whereby Kolfage would be covertly paid $100,000 up front and then $20,000 per month.
To preserve the secrecy of the arrangement, Bannon agreed to pass payments through his nonprofit, the indictment said. Kolfage did no work for the group.
Kolfage reportedly instructed that payments should be made to his wife to conceal the money.
Shea then proposed that he and Kolfage be paid via a “veiled” shell corporation to conceal the source and nature of the payments — with payments subsequently made through those source, the indictment said.
Prosecutors reported that Kolfage said they could falsely claim the shell company payments were for social media.
In April of 2019 Shea incorporated the company, started receiving payments from We Build the Wall, and shared the money with Kolfage, the indictment said.
Kolfage, of Miramar Beach, Fla.; Bannon, 66, of Washington, D.C.; Badolato, 56, of Sarasota, Fla.; and Shea, 49, of Castle Rock, Colo. are each charged with one count of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering, each of which carries a maximum penalty of 20 years in prison, according to the Justice Department.
The defendants were arrested this morning. Kolfage was to appear Thursday before U.S. Magistrate Judge Hope T. Cannon in the Northern District of Florida.