Ex-Trump adviser Steve Bannon arrested on yacht in waters off of Westbrook, pleads not guilty in ‘border wall’ fundraising fraud scheme

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NEW YORK (AP/WTNH) — President Donald Trump’s former chief strategist Steve Bannon pleaded not guilty to charges that he ripped off donors to an online fundraising scheme to build a southern border wall in federal court Thursday, hours after he was pulled from a yacht off the coast of Connecticut and arrested.

Bannon was taken into custody around 7 a.m. by the U.S. Postal Inspection Service on a 150-foot (45-meter) luxury yacht called Lady May, which was off the coast of Westbrook, authorities said. The boat is owned by exiled Chinese billionaire Guo Wengui and currently for sale for nearly $28 million.

According to Marine Traffic, a commercial tracking service, the vessel’s transponder signal went dark on June 17, shortly after it departed a port in Bridgeport en route to Miami, potentially indicating its beacon was inoperable or had been turned off.

News 8 has confirmed that the Lady May was still in the waters off of Westbrook Thursday afternoon.

A News 8 viewer shared a photo of what he says is Bannon on the Lady May in the waters near the Water’s Edge Resort & Spa on Wednesday evening.

Folks in town say they saw a lot of activity around there. Helicopters and so forth yesterday and also some people say they saw Steven Bannon right on the back of the boat.

“This morning we happened to see the Coast Guard Cutter the ship put itself in the stern of the Lady May and that was when Steve Brannon had been arrested which we did not know at the time,” said Evan Honeyman, Westbrook.

RELATED: Shoreline town reacts to reported arrest of former Trump advisor off the coast of Westbrook

He and three others were charged in an indictment unsealed Thursday in Manhattan federal court.

At his hearing the same day, Bannon had his hands cuffed in front of him while a large, white mask covered most of his face. He rocked back and forward as he sat on a chair in a holding cell at Manhattan federal court, from where he appeared via video as his lawyers were on the telephone.

The magistrate judge approved Bannon’s release on $5 million bail, secured by $1.75 million in assets.

Trump quickly distanced himself from Bannon while claiming he knew nothing about the project and never believed in a privately financed barrier.

“When I read about it, I didn’t like it. I said ‘this is for government, this isn’t for private people.’ And it sounded to me like showboating,” he told reporters at the White House, adding that he felt “very badly” about the situation.

As for the investigation, the “We Build The Wall” fundraiser was headed by men who pushed their close ties to President Trump and raised more than $25 million. They touted their effort to help the president realize his vision of a “big beautiful” wall along the U.S.-Mexico border, especially after Trump’s effort to redirect millions in government funds, was held up through lawsuits.

But according to the criminal charges unsealed Thursday, little of the wall was actually constructed. Instead, the money lined the pockets of some of those involved. Bannon, who served in Trump’s 2016 campaign and the White House, received over $1 million himself, using some to secretly pay co-defendant Brian Kolfage, the founder of the project, and to cover hundreds of thousands of dollars of Bannon’s personal expenses.

According to the indictment, Bannon promised that 100% of the donated money would be used for the project, but the defendants collectively used it in a manner inconsistent with the organization’s public representations.

They faked invoices and created sham “vendor” arrangements, among other ways, to hide what was really happening, according to the indictment. “All money donated to the ‘We Build the Wall’ campaign goes directly to wall!!! Not anyone’s pocket,” the lawsuit said.

Bannon is among numerous former Trump associates who have found themselves under indictment or in jail, including his former campaign chair, Paul Manafort, his longtime lawyer, Michael Cohen, and his former national security adviser, Michael Flynn.

An immigration plan unveiled by Trump last year included a proposal to allow public donations to pay for his long-promised southern border wall. At that point, the GoFundMe campaign launched by war veteran Brian Kolfage had raised more than $20 million for wall construction.

But Trump later denounced the project publicly, tweeting last month that he “disagreed with doing this very small (tiny) section of wall, in a tricky area, by a private group which raised money by ads. It was only done to make me look bad, and perhaps it now doesn’t even work. Should have been built like rest of Wall, 500 plus miles,” he said.

Trump on Thursday told reporters that he knew nothing about the project and never believed in a privately financed barrier.

White House spokeswoman Kayleigh McEnany said Trump “has not been involved with Steve Bannon since the campaign and the early part of the administration, and he does not know the people involved with this project.”

The defendants learned last October from a financial institution that the wall-building campaign might be under federal criminal investigation and took additional steps to conceal the fraud, according to the indictment.

Charges included conspiracy to commit wire fraud and conspiracy to commit money laundering.

We Build the Wall, launched on Dec. 17, 2018, originally promoted a project for 3 miles of fence posts in South Texas that was ultimately built and largely funded by Fisher Industries, which has received about $2 billion in funding for wall contracts. The company’s CEO, Tommy Fisher, did not respond to calls for comment.

In 2019, Kolfage and Fisher successfully constructed a half-mile of bollard-style border fence on privately donated land in New Mexico near of El Paso, Texas. We Build The Wall used early construction to raise more cash and more private land donations in along border states.

Construction faced resistance by local authorities in New Mexico and Texas and accusations of improper permitting. In May, federal officials found that a section of Fisher’s privately funded wall violated flood construction standards along the Rio GrandeIt also caused erosion.

Dustin Stockton, who helped start the campaign then left the project to work on the upcoming presidential election, said it seemed clear that federal prosecutors were “attacking political infrastructure that supports President Trump right before the election.”

He could not comment on the specific charges yet. He was not charged in the case.

Bannon led the conservative Breitbart News before being tapped to serve as chief executive officer of Trump’s campaign in its critical final months, when he pushed a scorched-earth strategy that included highlighting the stories of former President Bill Clinton’s accusers. After the election, he served as chief strategist during the turbulent early months of Trump’s administration.

The blunt-spoken, combative Bannon was the voice of a nationalist, outsider conservatism, and he pushed Trump to follow through on some of his most contentious campaign promises, including his travel ban on several majority-Muslim countries. But Bannon also clashed with other top advisers, and his high profile sometimes irked Trump. He was pushed out in August 2017.

Bannon, who served in the Navy and worked as an investment banker at Goldman Sachs before becoming a Hollywood producer, has been hosting a pro-Trump podcast called “War Room” that began during the president’s impeachment proceedings and has continued during the pandemic.

Kris Kobach, a conservative firebrand and the former Kansas secretary of state, was general counsel for the group that ran the wall fundraising effort. Kobach, who lost a race for Senate in Kansas earlier this month, is known nationally for advocating restrictive immigration policies.

A day before the indictment was unsealed, Kolfage was interviewed by Bannon on Bannon’s “War Room” podcast. He discussed a dispute with the fundraising platform and encouraged future donors to go straight to their website.

Bannon asked him whether he thought the wall could get built to fulfill Trump’s campaign promise.

“I think we stand in a pretty good spot, as long as he gets elected,” Kolfage said.

Copyright 2020 Nexstar Broadcasting, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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