The four men began using both a Bannon-controlled non-profit and a Shea-led shell company, as well as vendor agreements and fake invoices, to conceal their tracks, court documents said.
Prosecutors say the men gave repeated false assurances to donors, vowing that all funds raised would go "only directly to wall!!! Not anyone's pocket".
Kolfage, a Florida-based 38-year-old, at one point even urged donors to purchase coffee from another company he ran, saying it was the only way to keep "his family fed and a roof over their head", prosecutors said.
Boat payments and plastic surgery
Some donors wrote personally to Kolfage saying they were low on funds and skeptical of online fundraising, "but they were giving what they could because they trusted Kolfage would keep his word about how their donations would be spent", the indictment said.
Kolfage — a US Air Force veteran and triple amputee wounded while serving in Iraq — repeatedly assured them their money was safe, but in fact, prosecutors say he took more than $350,000 for his own use, funding personal expenses including boat payments, a luxury SUV, a golf cart, cosmetic surgery, and credit card debt.
Badolato, Shea and Bannon each received hundreds of thousands that went to expenses including travel, hotels and consumer goods, according to the documents.
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Bannon in particular received over $1 million of the donations which he funneled through his non-profit, using some of it to pay Kolfage while a substantial sum lined his own pockets.
The men learned their scheme might be under federal criminal investigation in approximately October 2019, when they began crafting additional measures to conceal it, prosecutors said.