Steve Bannon: Ex-Trump aide blames fraud charge on people trying to stop border wall as he leaves court

Prosecutors allege Trump's former senior adviser defrauded donors in $25m US-Mexico border wall project

Steve Bannon has claimed that federal charges brought against him and three other men in an allegedly fraudulent crowdfunding campaign are an attempt to "stop people who want to build" a US-Mexico border wall supported by Donald Trump.

"This entire fiasco is to stop people who want to build the wall," the president's former adviser said as he left US District Court in New York, where he pleaded not guilty to wire fraud and money laundering on Thursday. He faces up to 40 years in prison, if convicted.

He made the brief statement as he exited federal court in Manhattan and stepped into a black Cadillac Escalade.

Artist's sketch showing former White House Chief Strategist Steve Bannon listening to Judge Stewart Aaron as he appears on video during his arraignment hearing for conspiracy to commit wire fraud and conspiracy to commit money laundering inside Manhattan Federal Court in the Manhattan borough of New York City on 20 August, 2020 (REUTERS)

His bail has been set at $5m, with $1.75m in cash and real estate assets. He must surrender his passport and is only allowed to travel to parts of New York, Washington DC, Maryland, Virginia and Connecticut for work-related reasons. He also is prohibited from boarding private jets and yachts without court permission.

He was arrested by at 7.15am on Thursday morning by agents with the New York Field Office of the United States Postal Inspection Service while he was aboard a Chinese billionaire's yacht off the coast of Connecticut.

Mr Bannon and three other men involved with a "We Build the Wall" charity – Brian Kolfage, Andy Badolato and Timothy Shea – were charged on Thursday in one of the most politically charged cases connected to the president's campaign in the hands of Acting US Attorney Audrey Strauss, who entered the role after her predecessor Geoffrey Berman was abruptly fired by Mr Trump in June.

All four men were arrested on Thursday and charged with one count each of conspiracy to commit wire fraud and conspiracy to commit money laundering.

"To induce donors to donate to the campaign, Kolfage and Bannon – each of whom, as detailed herein, exerted significant control over We Build the Wall – repeatedly and falsely assured the public that Kolfage would 'not take a penny in salary or compensation' and that '100% of the funds raised'" would be used for the crowdfunding campaign's stated purpose, according to a 24-page indictment filed in US District Court in New York and unsealed on Thursday.

"As Bannon publicly stated, 'we're a volunteer organisation'," according to the indictment. "Those representations were false."

The men "defrauded hundreds of thousands of donors, capitalising on their interest in funding a border wall to raise millions of dollars, under the false pretence that all of that money would be spent on construction" along the US-Mexico border, US Attorney Strauss said in a statement.

Instead, the campaign, which raised more than $25m, was used to fund their own lavish lifestyles through "sham invoices and accounts to launder donations" to conceal their crimes, according to Inspector-in-Charge Philip R Bartlett.

Mr Bannon allegedly took $1m from that campaign funnelled through a nonprofit organisation under his control. He allegedly used "hundreds of thousands of dollars" to cover personal expenses.

Prosecutors alleged that Mr Kolfage, a US Air Force veteran, "covertly took for his personal use more than $350,000 in funds" raised by We Build the Wall.

The scheme relied on routeing payments from the crowdfunding campaign into a nonprofit and a shell company under Mr Shea's control, using fraudulent invoices and "sham vendor agreements" to conceal their fraud, prosecutors said.

The president immediately sought to distance himself from the indictments.

White House press secretary Kayleigh McEnany insisted that "President Trump has no involvement in this project and felt it was only being done in order to showboat, and perhaps raise funds."

"I feel very badly," the president said on Thursday following reports that his former aide had been arrested. "I haven't been dealing with him for a long period of time as most of the people in this room know. He was involved in our campaign ... and for a small part of the administration, very early on. Haven't been dealing with him at all."

Mr Bannon, a former executive chairman at Breitbart, served as the president's chief strategist at the White House but left the administration within the president's first eight months. He previously served as the campaign's chief executive officer.

We Build the Wall began as a massive GoFundMe campaign, circumventing the president's campaign trail promise and legal and congressional obstacles for a massive border wall project with a privately funded effort.

The campaign drew some support from Homeland Security and Border Patrol officials, as well as the president's son Donald Trump Jr, who called it "private enterprise at its finest" in 2018.

"Brian thanks so much for all your sacrifices, doing this and showing really what capitalism's all about," he said during a We Build the Wall event that year. "This is private enterprise at its finest. Doing it better, faster, cheaper than anything else."

Roughly a month after the president criticised the effort, the president told reporters at the White House on Thursday that he knows "nothing about the project other than I didn't like 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 said. "And I think I let my opinion be very strongly stated at the time."