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Ex-Trump adviser Steve Bannon arrested on charges of defrauding donors to 'Build the Wall' campaign

Bannon was aboard a 150-foot-long yacht, off the coast of Westbrook, Connecticut, when he was arrested, law enforcement sources said.

Federal prosecutors on Thursday indicted one-time presidential aide Steve Bannon and three others on charges of taking money donated to help build a wall along the southern border, authorities said.

Bannon, Brian Kolfage, Andrew Badolato, Timothy Shea "and others orchestrated a scheme to defraud hundreds of thousands of donors," according to prosecutors in the U.S. Attorney's office for the Southern District of New York.

The defendants' online crowdfunding campaign “We Build The Wall” raised more than $25 million, with Kolfage "repeatedly and falsely assured the public that he would 'not take a penny in salary,'" prosecutors said in a statement. And Bannon "publicly stated, 'we’re a volunteer organization,'” prosecutors said.

But in fact, prosecutors said, the defendants took hundreds of thousands of donated dollars and used them for personal expenses.

Bannon was taken into custody by the U.S. Postal Inspection Service on Thursday morning, officials said. He's expected to make his first appearance in court later on Thursday.

He was aboard a 150-foot-long yacht in Long Island Sound, off the coast of Westbrook, Connecticut, when he was arrested, law enforcement sources told NBC News. Bannon is not the owner of the vessel and the arrest was made without incident.

Bannon is the former executive chairman of Breitbart News and once served as chief strategist for President Donald Trump.

And as the president struggled to gain funding for the wall — which he promised Mexico would pay for during his 2016 campaign — the group "We Build The Wall" vowed to step in with donations that go completely toward that effort.

"Those representations were false," according to prosecutors.

"In truth, Kolfage, Bannon, Badolato and Shea 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."

Kolfage pocketed more than $350,000 in "We Build The Wall" money while Bannon used a separate non-profit organization under his control to receive more than $1 million from wall-building fund, federal authorities said.

The defendants also allegedly used a non-profit organization and shell company under Shea's control to move money.

"They did so by using fake invoices and sham 'vendor' arrangements, among other ways, to ensure, as Kolfage noted in a text message to Badolato, that his pay arrangement remained 'confidential' and kept on a 'need to know' basis," prosecutors said.

Kolfage is listed as the founder of We Build The Wall, with Bannon named as advisory board chairman, according to the group's website.

Dustin Stockton, a longtime Bannon ally and public relations contact for #GoFundTheWall, tweeted that he “got raided by SWAT serving a warrant for my phone out of SDNY” early Thursday morning.

Stockton is a Republican political operative and former writer at Breitbart. He and Bannon launched the Breitbart offshoot Big League Politics in 2017.

In 2018, he and his girlfriend, Jennifer Lawrence, spearheaded media strategy for Kolfage’s wall fundraising campaign. Stockton was not arrested and called the raid “political intimidation” in tweets on Thursday morning.

Lawrence is listed as We Build The Wall's communications director.

Stockton said, in a text messages to NBC News, that he and Lawrence were inside their recreational vehicle in Mesquite, Nevada, when authorities arrived at about 5:30 a.m. Their cell phones were the only items seized in the raid, he said.

In a tweet later Thursday morning, Stockton said We Build The Wall "delivered segments of wall for a fraction of what it would have cost the government to its donors."

He accused prosecutors of political dirty work.

"The selective leak of certain operating expenses right before an election is not in service to WBTW donors," Stockton added. "It's political intimidation."

Prosecutors within the Southern District of New York, based in Lower Manhattan, are widely known as the most independent and non-partisan group within the U.S. Attorney’s Office.

It takes wide latitude to investigate white collar criminals and organized crime, with law enforcement insiders often quipping that SDNY stands for the “Sovereign District of New York" because of its autonomy.

But back in June, the office was rocked by Friday night efforts to oust U.S. Attorney Geoffrey Berman. The Department of Justice announced he had resigned, only to have Berman say he had not.

While Berman lost that battle with Attorney General William Barr within 24 hours, he won a major concession. Berman secured the temporary appointment of trusted deputy, Audrey Strauss, to take his spot - rather than the administration's announced choice, Jay Clayton, the head of the Securities and Exchange Commission.

As he went out the door, Berman said key investigations would continue.

"I will step down when a presidentially appointed nominee is confirmed by the Senate,” he said in a statement. “Until then, our investigations will move forward without delay or interruption. I cherish every day that I work with the men and women of this Office to pursue justice without fear or favor — and intend to ensure that this Office's important cases continue unimpeded."

This is a developing story, please refresh here for updates.

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