Two Sentenced To Prison For ‘We Build The Wall’ Online Fundraising Fraud Scheme

 

 Damian Williams, the United States Attorney for the Southern District of New York, announced that BRIAN KOLFAGE and ANDREW BADOLATO were sentenced by United States District Judge Analisa Torres.  KOLFAGE was sentenced to 51 months in prison, and BADOLATO was sentenced to 36 months in prison, for their respective roles in carrying out a scheme to defraud hundreds of thousands of donors in connection with an online crowdfunding campaign known as “We Build The Wall” by soliciting donations using false statements and then stealing the resulting donations.

U.S. Attorney Damian Williams said: “Brian Kolfage and Andrew Badolato abused the trust of donors to We Build the Wall and stole hundreds of thousands of dollars in donations to line their own pockets.  The defendants have now been held accountable for their criminal conduct.”

According to court filings and evidence introduced during court proceedings:

Starting in approximately December 2018, BRIAN KOLFAGE, ANDREW BADOLATO, their co-defendant TIMOTHY SHEA, and others orchestrated a scheme to defraud hundreds of thousands of donors, including donors in the Southern District of New York, in connection with an online crowdfunding campaign ultimately known as “We Build The Wall” that raised more than $25,000,000 to build a wall along the southern border of the United States.  In particular, to induce donors to donate to the campaign, KOLFAGE repeatedly and falsely assured the public that he would “not take a penny in salary or compensation” and that “100% of the funds raised…will be used in the execution of our mission and purpose.”

Those representations were lies.  In truth, KOLFAGE, BADOLATO, SHEA, and others received hundreds of thousands of dollars in donor funds from We Build the Wall, which they each used in a manner inconsistent with the organization’s public representations.  For example, KOLFAGE covertly took for his personal use more than $350,000 in funds that donors had given to We Build the Wall.  To conceal the payments to KOLFAGE from We Build the Wall, KOLFAGE, BADOLATO, SHEA, and others devised a scheme to route those payments through entities and bank accounts that they controlled.  They took various steps to obscure or conceal these payments, including by using fake invoices and sham contracts — conduct for which SHEA was convicted at trial of obstruction of justice.

In imposing these sentences on KOLFAGE and BADOLATO, Judge Torres noted that “this was no ordinary financial fraud,” because when victims donated to We Build the Wall, “they were expressing their views about a political issue that was important to them.”  Noting that the offense cast doubt on the efficacy of political involvement and that the scheme would “undoubtedly have a chilling effect” on political donations, Judge Torres remarked that “the fraud perpetrated by Mr. Kolfage and Mr. Badolato went well beyond defrauding individual donors. They hurt us all.”

KOLFAGE, 41, of Miramar Beach, Florida, and BADOLATO, 58, of Cocoa, Florida, each pled guilty to one count of conspiracy to commit wire fraud.  KOLFAGE also pled guilty to tax and wire fraud charges originally filed by the United States Attorney’s Office for the Northern District of Florida. 

SHEA, 52, of Castle Rock, Colorado, was convicted after trial of conspiracy to commit wire fraud, conspiracy to commit money laundering, and obstruction of justice, and is scheduled to be sentenced by Judge Torres on June 13, 2023.

In addition to the prison terms, KOLFAGE was sentenced to three years of supervised release and ordered to forfeit $17,872,106 and pay restitution in the amount of $2,877,414. BADOLATO was sentenced to three years of supervised release and ordered to forfeit $1,414,368 and pay restitution in the amount of $1,414,368.  Judge Torres also separately ordered forfeiture of $1,376,597.39 of funds held by We Build the Wall and real property located in Sunland Park, New Mexico, on which We Build the Wall had constructed a portion of a wall.

Mr. Williams praised the outstanding investigative work of the United States Postal Inspection Service and the Special Agents of the United States Attorney’s Office for the Southern District of New York.

News, updates and more from NYC Council Member Rafael Salamanca, Jr.

COUNCIL MEMBER RAFAEL SALAMANCA, JR. HOST 1st MOTHER'S DAY CELEBRATION Email Council Member Salamanca Visit our District Office at:  1070 Southern Boulevard Bronx, New York 10459 (718) 402-6130 salamanca@council.nyc.gov

MAYOR ADAMS DELIVERS REMARKS AT FLAG-RAISING CEREMONY FOR ISRAEL

 

Mayor Eric Adams: There's only one Rabbi Potasnik. And he's right, just a longtime friend and advisor and a person that truly loves this city and the people in this city. And we have been side by side on many occasions when we saw the ugly face of hate expose itself. It didn't matter if it was fighting on behalf of our brothers and sisters from the Muslim community when women were attacked for wearing a hijab. If it's someone that draws a swastika on a building or desecrates a church statue or harms someone because they're from the AAPI community, there's just a consistent understanding that we must lift each other up. And he represents what's best about us, I say all the time, we’re members of the greatest race alive, the human race, and you are truly a representation of that.

 

We know, and no matter what people say on other parts of the globe or in other cities, we know that New York is the Tel Aviv of America. We have the largest Jewish population outside of Israel right here. And on my two visits there and getting ready to return again, we know what the Israeli people stand for and what they represent across the entire globe. Built into your culture is what you call mitzvah. You believe in giving back. You believe in ensuring that you help your fellow man and women. That is who you are. And so when we stand here and celebrate your anniversary, your independence, your creation, that is also a celebration for those who have touched in many ways.

 

And we also must reflect on a reminder that the dark and ugly parts of what has impacted your culture and your people. When I was in Kraków and went to the camps, walking through there, seeing the tragedies in horrors that is unspeakable, the number of young people who don't know their great-grandparents and great aunts and great uncles because they lost them during the Holocaust. It must be a reminder that we never can stand by again and watch hate start out as words and turn into action. That is my commitment as the mayor of this city. To say, first, thank you for being part of this great city. In saying that, I am looking forward to raising this flag to show the solidarity that New York City has with the people of Israel.

 

Let's continue to uplift each other, let's continue to stand for what is right and let's continue to raise the flag in solidarity with Israel. Thank you very much. Thank you, Rabbi.

 

STATE COMPTROLLER THOMAS P. DiNAPOLI STATEMENT ON NEW YORK CITY MAYOR's PROPOSED EXECUTIVE BUDGET

 

New York State Comptroller Thomas P. DiNapoli released the following statement on Mayor Adams' executive budget for Fiscal Year (FY) 2024:

“The city has laid its fiscal cards on the table, including budget risks my office has raised in recent years. The mayor’s executive budget provides a more transparent accounting for new costs associated with collective bargaining wage increases and asylum seekers. It also shows stronger than projected city revenues and additional savings from the Program to Eliminate the Gap (PEG).

“While the budget is balanced for FY 2024, the city faces challenges in the future as outyear budget gaps have grown and projected savings from the PEG will not be enough to offset these new costs. This suggests it will become even more difficult for the city to find savings without affecting services over time. The budget gaps, which could reach $10 billion in FY 2027, also highlight the importance of further building up reserves, a missed opportunity in the current fiscal year.

“The cost of asylum seekers, unbudgeted at this time last year, is expected to reach $2.9 billion in FY 2024, larger than the Fire Department’s operating budget. The city then budgets $1 billion for migrants in FY 2025 and zero thereafter, creating some uncertainty and highlighting the difficulty with accounting for this cost. The city assumes the state will provide nearly a third of the funding support needed but federal funds are not there and greater clarity from the federal government is needed to manage the situation.

“The delay in the state budget has created additional fiscal uncertainty for the city, which will have to be remedied in the city’s adopted budget expected in June. A swift agreement by the legislature and Governor will provide New York City, and other localities whose fiscal year is set to begin, greater certainty in managing their budgets.”

NYC PUBLIC ADVOCATE'S RESPONSE TO THE FY2024 EXECUTIVE BUDGET

 

"With over half of New York’s families unable to meet the minimum cost of living in our city amid an affordability crisis, we must not repeat the mistakes of the past by pushing austerity at times of greatest need.

"As I argued in Washington, D.C. last week, the necessity of state and federal funding to support the needs of asylum seekers is real and urgent. At the same time, so is the need to provide essential government services at their full capacity. These goals are part of the same moral and governing mandate, and one cannot be used as justification to impede the other. The issues highlighted during this surge in people seeking asylum also pre-dated it – the day before the first bus arrived at Port Authority, there were already 50,000 New Yorkers in shelters, many for years. Our city’s current budgetary challenges have certainly been exacerbated, but are rooted in years of government failure to address systemic problems.

"Our city has faced fiscal hardship many times in our history, and the prudent path has been investment, then and now. Not funding agencies and programs adequately, or worse, cutting them, has a real cost, and we must all agree to prevent them in the final budget.

"I know that there are areas of agreement with the administration on issues like preventing gun violence, creating deeply affordable housing, and supporting mental healthcare. Beyond agreeing on principles, we have to prioritize funding and implementation of programs to meet them. On gun violence, for example, we still await a long-promised report and plan to be put in place, and a previously funded anti-violence mentorship pilot to launch.

"As we continue to review the details of this executive budget proposal, we must be clear that in the coming fiscal year, it’s time for concrete action. We can neither retreat from past promises nor preserve the status quo - we must progress."

MAYOR ADAMS RELEASES EXECUTIVE BUDGET FOR FISCAL YEAR 2024, LARGEST EXECUTIVE BUDGET IN CITY HISTORY

 

Despite Fiscal Challenges, Budget Protects Critical Programs for Working New Yorkers While Realizing Significant Agency Savings

 

No Cuts to Budgets for Libraries and Cultural Institutions

 

New York City Still Faces $4.3 Billion in Costs Related to Asylum Seeker Crisis Through FY24

New York City Mayor Eric Adams today released New York City’s $106.7 billion Fiscal Year 2024 (FY24) Executive Budget. Mayor Adams unveiled the largest Executive Budget in city history to protect critical programs that support working New Yorkers, while simultaneously preparing for economic headwinds by continuing his strong track record of fiscal responsibility. The budget also includes strategic investments that improve New Yorkers’ quality of life, including investments that create sustainability and resiliency programs, strengthen the city’s mental health resources, build out the college-to-career pipeline, and uplift working people.

 

FY23 and FY24 remain balanced, with outyear gaps of $4.2 billion, $6.0 billion, and $7.0 billion in fiscal years 2025 through 2027, respectively. Growth of $4.0 billion in FY24 over the Preliminary Budget is driven by asylum seeker costs and funding labor settlements with the city’s workforce.

 

“Our Fiscal Year 2024 Executive Budget prioritizes our working people’s agenda and keeps our city working for the benefit of all New Yorkers. But the challenges we face are real — including the costs of the asylum seeker crisis, the need to fund labor deals, and slowing tax revenue growth — and we must budget wisely,” said Mayor Adams. “The PEG was a success, achieving $1.6 billion in savings across the two fiscal years, and over $3 billion in the outyears without a single layoff or service reductions. Further, we did not cut a single penny from libraries or cultural institutions, and adjusted savings targets for agencies to avoid cutting critical needs. This budget also makes upstream investments to uplift working New Yorkers, makes our city more sustainable, strengthens mental health services, and builds out the college-to-career pipeline. We had to make tough choices in this budget and balance competing needs, but our administration always puts the well-being of New Yorkers first, second, and third.”

 

In the last year, more than 57,000 asylum seekers have arrived in New York City, and more than 35,000 still remain in the city’s care. The city anticipates that the cost of providing shelter, food, clothing, and other services for asylum seekers will be $4.3 billion through the end of FY24.

 

In the last few months, Mayor Adams also announced labor agreements with District Council 37 and the Police Benevolent Association, which set the economic framework for labor deals with the city’s workforce. The total additional cost of reaching agreements with the city’s remaining unionized workforce is expected to be approximately $16 billion over the duration of the financial plan.

 

In response to the dramatic growth in the cost of caring for asylum seekers and the need to add funds to support labor deals, Mayor Adams implemented a Program to Eliminate the Gap (PEG) in the Executive Budget to reduce costs and promote efficiency. The PEG achieved $1.6 billion in savings across FY23 and FY24 without laying off a single employee or cutting any services. This PEG was applied strategically, and the Adams administration did not remove a single cent from the budgets of New York City’s public libraries or the New York City Department of Cultural Affairs, which funds museums and other cultural institutions, out of concern that reductions in budgets at this time would negatively impact their ability to provide core services. Targets were also reduced for numerous other agencies — including the Fire Department of the City of New York, the New York City Department of Sanitation (DSNY), the New York City Department of Parks & Recreation, the New York City Department of Youth & Community Development, the New York City Human Resources Administration, the New York City Department of Homeless Services, and more — that could not sustain full PEG cuts without jeopardizing public safety, health, or other critical services for New Yorkers. The administration continues to work with agencies to identify ways to operate more efficiently while delivering effective services to all New Yorkers.

 

Tax revenues increased by $2.1 billion in FY23 and $2.3 billion in FY24, driven by better-than-anticipated growth in personal income tax, business tax, and sales taxes, and helped maintain balance. Financial experts widely predict an economic slowdown later this year, which will in turn slow city tax revenue growth in the outyears.

 

The FY24 investments include:

 

Uplifting Working People

• Helping more New Yorkers claim the Earned Income Tax Credit and other tax benefits by expanding the NYC Free Tax Preparation program ($1.6 million).
• Increasing outreach to New Yorkers about cash assistance, Supplemental Nutrition Assistance Program (SNAP) benefits, Medicaid, and more with New York City benefits ($5.3 million).
• Adding more attorneys and specialists to the New York City Commission on Human Rights’ Source of Income Unit as part of “Housing Our Neighbors: A Blueprint for Housing and Homelessness” and the administration’s ongoing efforts to fight discrimination against New Yorkers who rely on housing vouchers ($1.3 million).
• Expanding free broadband access from 129 to 202 New York City Housing Authority developments through the Big Apple Connect program ($8.7 million).
• Adding child care, workforce, and business portals online, and increasing the capabilities of the MyCity platform ($19.3 million).

Improving Sustainability and Resiliency

• Supporting the tenets of “PlaNYC: Getting Sustainability Done,” including:
  • Expanding DSNY’s curbside organics program citywide ($23.2 million).
  • Supporting climate education in classrooms across all subjects and grade levels, as well as providing climate education training to teachers ($2.1 million).

Strengthening the City’s Mental Health Resources

• Baselining funding and continuing the expansion of the Behavioral Health Emergency Assistance Response Division (B-HEARD) program into the remainder of the Bronx, as well as additional high-need neighborhoods in other boroughs ($27 million).
• Supporting mental health services for children in family shelters via telehealth as part of the “Housing Our Neighbors” blueprint ($1 million).
• Developing digital access to mental health support, in collaboration with New York state, to consolidate and streamline how New Yorkers with serious mental illness access services ($1 million).
• Increasing the capacity of clubhouses that provide peer-led support in high-need areas citywide ($2 million).
• Launching the School Tele-Mental Health program that gives high school students access to telehealth services ($9 million).

Building Out the College-to-Career Pipeline

• Supporting the City University of New York’s (CUNY) Inclusive Economy Initiative programs ($4.8 million), including:
  • Supporting its Industry-Campus Backbone Initiative, in which staff engage with employers to secure industry-specific internships and job opportunities for students and help update curriculum to match current trends.
  • Investing in the Boosting CUNY Career Capacity program, which links students with industry experts who give academic and career advice.
• Investing in the Medgar Evers College Brooklyn Recovery Corps, which connects 200 students a year with nonprofits and small businesses in Brooklyn to work on projects that spur economic recovery and growth ($1 million).
• Funding and expanding the CUNY Reconnect program, which helps students who left CUNY because of extenuating circumstances return and earn their degree ($5.8 million).
• Supporting the Mayor’s Office for People with Disabilities’ plan to promote workforce development for people living with disabilities, as announced in second “State of the City” address ($1.2 million).

Leader Of Miami Crew Pleads Guilty To Defrauding Banks And Cryptocurrency Exchange Of More Than $4 Million

 

 Damian Williams, the United States Attorney for the Southern District of New York, announced that ESTEBAN CABRERA DA CORTE, a/k/a “Esteban Cabrera,” a/k/a “Esteban Da Corte,” a/k/a “Steban,” pled guilty today to participating in a scheme to steal millions of dollars’ worth of cryptocurrency and trick U.S. banks into refunding the millions used to purchase that cryptocurrency, in part by using personal identifying information stolen from other people. 

U.S. Attorney Damian Williams said: “Esteban Cabrera Da Corte orchestrated a scheme to steal millions of dollars by buying cryptocurrency using false and stolen identities and then deceiving U.S. banks regarding those transactions.  As a result of his guilty plea, Cabrera Da Corte is now being held to account.  Our Office will continue to work vigorously with our law enforcement partners to protect the integrity of U.S. banks and financial markets to the full extent of the law from those who seek to enrich themselves through fraud and deceit, including those who attempt to shroud themselves in the anonymity of digital transactions.”

According to the Indictment and statements made in court:

From at least in or about 2020 through at least in or about March 2020, CABRERA DA CORTE and his co-conspirators engaged in a scheme to deceive U.S. banks and a leading cryptocurrency exchange platform (the “Cryptocurrency Exchange”) by purchasing more than $4 million in cryptocurrency and then falsely claiming that the cryptocurrency purchase transactions were unauthorized, deceiving the U.S. banks and the Cryptocurrency Exchange into reversing those transactions and redepositing the money into the bank accounts that the Defendants controlled.  The Defendants then withdrew the money from the bank accounts.

To carry out this scheme, the Defendants opened accounts with the Cryptocurrency Exchange, frequently using photos of fake U.S. passports, fake drivers’ licenses, and stolen personal identifying information.  The Cryptocurrency Exchange accounts were linked to bank accounts that the Defendants controlled.  The Defendants used money that had been deposited into the linked bank accounts, frequently through a series of cash deposits made using ATMs, to purchase cryptocurrency.  That cryptocurrency was then quickly transferred to other cryptocurrency wallets outside of the Cryptocurrency Exchange that were controlled by the Defendants and their co-conspirators.  After the cryptocurrency was transferred, the Defendants made telephone calls to the U.S. banks during which they falsely represented that the cryptocurrency purchases were unauthorized, leading the banks to reverse the transactions. 

The operation of this scheme by the Defendants resulted in U.S. banks processing more than $4 million in fraudulent reversals and the Cryptocurrency Exchange losing more than $3.5 million worth of cryptocurrency. 

ESTEBAN CABRERA DA CORTE, 26, of Miami, Florida, pled guilty to one count of conspiracy to commit wire fraud, which carries a maximum term of 20 years in prison, and agreed to pay restitution of $3,578,786.69 and forfeiture of $1,200,000. 

The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.

Mr. Williams praised the outstanding work of Homeland Security Investigations’ El Dorado Task Force. 

Housing Lottery Launches For 2441 Crotona Avenue In Belmont, The Bronx

The affordable housing lottery has launched for 2441 Crotona Avenue, a seven-story residential building in Belmont, The Bronx. Designed by Marin Architect and developed by Stagg Group, the structure yields 51 residences. Available on NYC Housing Connect are 25 units for residents at 130 percent of the area median income (AMI), ranging in eligible income from $75,395 to $215,150.

 

At 130 percent of the AMI, there are five studios with a monthly rent of $2,199 for incomes ranging from $75,395 to $138,840; 18 one-bedrooms with a monthly rent of $2,239 for incomes ranging from $76,766 to $156,130; one two-bedroom with a monthly rent of $2,566 for incomes ranging from $87,978 to $187,330; and one three-bedroom with a monthly rent of $3,200 for incomes ranging from $109,715 to $215,150.

Prospective renters must meet income and household size requirements to apply for these apartments. Applications must be postmarked or submitted online no later than June 20, 2023.