Brian Kolfage, who had previously entered a not guilty plea to charges that he embezzled money from the “We Build The Wall Inc.” crowdfunding website, entered a guilty plea this week for tax and wire fraud.
The case against Kolfage stems from a grand jury indictment naming him, Andrew Badolato, Timothy Shea, and former President Donald Trump aide Steve Bannon in an embezzlement investigation filed in U.S. District Court in August 2020.
According to court documents, Kolfage initiated an online fundraising campaign in December 2018 that generated more than $20 million using crowdfunding. The movement behind the website planned to donate the money raised to the federal government to construct a wall along the southern border of the U.S.
The crowdfunding website suspended the campaign at one point, warning Kolfage that unless he identified a legitimate nonprofit organization into which those funds could be transferred, the crowdfunding website would return the funds to the donors.
In January of 2019, Bannon is alleged to have taken control of the organization and day-to-day activities, including its finances, and established the not-for-profit entity We Build the Wall Inc.
Court records state that to persuade the crowdfunding website to release the funds for transfer to the We Build the Wall organization, Kolfage, Bannon, and Badolato agreed that donors would have an “opt-in” option on the account, effectively allowing the organization to reraise the funds by convincing donors to permit the transfer.
In January of 2019, the defendants allegedly made public statements on social media and in press appearances, promising donors that 100% of the funds raised would be used to construct the wall at the border, and not a penny would be used to compensate Kolfage.
In February of 2019, Kolfage allegedly started receiving a monthly salary and other payments, and in October of 2019, when the defendants learned of a possible criminal investigation, they allegedly took additional steps to conceal the scheme by using shell companies.
Between January and October 2019, We Build the Wall raised approximately $25 million, including most of the $20 million that donors “opted in” to transfer.
Court records state that some donors wrote directly to Kolfage, saying they did not have much money and were skeptical of the online fundraising campaigns. Still, they were giving what they could because they trusted Kolfage and trusted he would keep his word about how the money would be spent.
By October 2019, Kolfage had received more than $350,000 in donor funds. Bannon and the other defendants received hundreds of thousands of dollars each, which they allegedly used on personal expenses such as travel, hotel, and personal credit card debt.
On January 19, 2021, Trump granted Bannon a full and unconditional pardon in the matter.
On April 22, 2022, the three other co-defendants changed their pleas from “not guilty” to “guilty” and accepted plea bargains to reduce their sentences.
In remarks to Federal Court Judge Analisa Torres of New York’s Southern District during the hearing, Kolfage stated, “I knowingly and willfully conspired to receive money from the donations. I knew what I was doing was wrong.”
Kolfage pleaded guilty to tax evasion and failure to report income in addition to one count of wire fraud conspiracy.
“I knew what I was doing was wrong and a crime,” Kolfage told the judge, according to The Texas Tribune.
Kolfage is scheduled to be sentenced in September. He could face up to 46 years in prison, but as part of his plea deal, prosecutors have agreed to recommend a maximum of five years, according to the plea agreement.
