Castle Rock Man Arrested In Connection With Federal Border Wall Fraud Case
DENVER (CBS4) - A Castle Rock man is in the custody of the U.S. Marshals, accused of his role in a major plot to defraud donors to a "Build The Wall" online fundraising campaign. Timothy Shea was arrested by Postal Inspection agents in Castle Rock Thursday morning, accused of diverting the funds to himself, along with the other four indicted.
Shea left federal court in Denver with his attorney, his lips sealed beneath a mask after being released on bond. He is facing charges of conspiracy to commit wire fraud.
Also named in the indictment, filed in federal court by the U.S. Attorney for the Southern District of New York Thursday morning, is former White House Chief Strategist Stephen Bannon. Bannon was one of President Donald Trump's closest advisors, joining the campaign in 2016 and serving in the White House until August 2017. He is the sixth close associate of the president to face federal charges since 2017.
Bannon allegedly received $1 million from the fund.
Shea is accused of helping to orchestrate the fraud by setting up shell corporations to funnel money donated to an online campaign to another defendant, Brian Kolfage. Regular payments were made from the online fundraiser to Kolfage and his spouse through various back channels and under several false pretenses to fund their "lavish" lifestyle.The money was routed through the nonprofit and the shell company, run by Shea. Fake invoices and fraudulent vendor arrangements were used to make sure the scheme remained confidential.
A neighbor, Michelle Robison, told CBS4's Rick Sallinger, "It's shocking, because we had no idea, I mean, when you live in a neighborhood this quiet and when you hear something like that… it's really surprising and shocking."
Shea, his wife and three children live across the street in Castle Rock. Neighbors say it was around 5 a.m. Thursday when police and federal authorities arrived and took him into custody.
Robison says a large trash bin outside the Shea home appeared to have been searched and contents seized.
"When we got here they were outside. When we left the dumpster was full of stuff and it's not full anymore so it must have been emptied this morning, " Robinson said.
The men first learned they were under federal investigation in October 2019 and "thereafter took additional steps to conceal the fraudulent scheme."
Kolfage was paid an initial $100,000 and then an additional $20,000 monthly. He allegedly received more than $350,000 total, which were used to pay for home renovations, payments toward a boat, a luxury SUV, a golf cart, jewelry, cosmetic surgery, personal tax payments, and credit card debt.
The "We Build The Wall" campaign ultimately raised $25 million. Donors were repeatedly assured that "100% of fundraising through ... donations will only go towards the wall," and that Kolfage would not receive any compensation for his work.
"Although We Build the Wall spent money on the construction of the border wall, hundreds of thousands of dollars were siphoned out of We Build the Wall for the personal use and benefit of Kolfage, Bannon, Badolato and Timothy Shea," federal prosecutors said.
Each of the four men, including Shea, face one count of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering. Each count carries a maximum penalty of 20 years in prison.
Pres. Donald Trump reacted to the charges by saying the wall should not be privately funded, "I know nothing about it. I wasn't involved in the project. I have no idea who was."
Federal authorities are seeking forfeiture of a boat called "Warfighter," a car and any money received from We Build the Wall.
Shea was released on a $250,000 unsecured bond. He is to appear in federal court in the Southern District of New York on Aug. 31.