Donald Trump's former aide Steven Bannon is arrested and INDICTED over 'ripping off $25 million crowd-funded border wall scheme to pay for his and its co-founders' lavish lifestyles of boats and private jets' - and could face 40 YEARS in prison

Former Donald Trump campaign strategist was arrested Thursday and charged with defrauding hundreds of people as part of a group the promised to use private money to build a section of border wall, a signature issue of the president.

The We Build The Wall scheme raised $25 million to fund its own barriers in Texas and Arizona. 

The group's online appeal for funds included a picture of President Trump and a stamp that said 'Trump Approved.' 

Bannon, who helped steer Trump's campaign then joined him in the White House in 2017 as chief strategist only to be forced out, is accused of pocketing $1 million in the alleged scheme.  

The group's founder, Brian Kolfage of Florida, is also accused of fraudulently pocketing funds. He claimed he did not get a cent from the scheme but instead got $100,000 up front and $20,000 a month salary, prosecutors allege.

Kolfage, an Iraq war veteran who had both legs amputated and lost his right arm in 

The stunning indictment of a top former Trump advisor comes on Day Four of the Democratic convention, when Joe Biden is set to speak. 

The group promised donors it was a volunteer effort that would direct all funds toward a crash effort to construct wall without government red tape. In reality, say federal prosecutors in New York, the group's founders siphoned off funds for themselves.

'As alleged, the defendants defrauded hundreds of thousands of donors, capitalizing on their interest in funding a border wall to raise millions of dollars, under the false pretense that all of that money would be spent on construction,' according to the indictment unsealed in the Southern District of New York Thursday morning.

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In handcuffs: Steve Bannon was arrested and was due to be taken to federal court in Manhattan to face a judge on fraud charges

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How it was marketed: This was the GoFundMe originally set up to 'privately fund' a border wall

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'While repeatedly assuring donors that Brian Kolfage, the founder and public face of We Build the Wall, would not be paid a cent, the defendants secretly schemed to pass hundreds of thousands of dollars to Kolfage, which he used to fund his lavish lifestyle,' according to the indictment.

'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' because, as BANNON publicly stated, 'we're a volunteer organization.'

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Lavish lifestyle: Brian Kolfage boasted about his private jet travel before - now prosecutors say he continued it 

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Boats too: Florida-based Brian Kolfage boasted about his lifestyle on Instagram - now prosecutors say innocent donors paid for his way of living

The indictment states that Kolfage 'covertly took for his personal use more than $350,000 in funds that donors had given to We Build the Wall' through a non-profit he controlled.

It states that Bannon, who became wealthy through film investments, consulting, and formerly running the conservative Breitbart website, 'received over $1 million from We Build the Wall, at least some of which Bannon used to cover hundreds of thousands of dollars in Bannon's personal expenses.'

Said Inspector-in-Charge Philip R. Bartlett: 'As alleged, not only did they lie to donors, they schemed to hide their misappropriation of funds by creating sham invoices and accounts to launder donations and cover up their crimes, showing no regard for the law or the truth.'

The indictment says the alleged fraudsters used a non-profit and a shell company controlled by Kolfage.

They used fake invoices, sham vendors as part of the effort, keeping the system 'confidential' and 'need to know,' according to the indictment, which quotes from a Kolfage email.

Also indicted are Andrew Badolato of Florida and Timothy Shea of Colorado.

According to financial disclosures when he joined the White House staff, Bannon was worth between $10 million and $48 million in 2017, with most of the value in his consulting firm, Bannon Strategic Advisors. 

Kolfage, a Purple Heart triple amputee veteran behind the effort, pushed back at critics after he was accused in public of using funds to fund a lavish lifestyle – which included flying in private jets and buying a $600,000 boat.

He says he bought the vessel a year before the $20 million GoFundMe campaign for the wall. Kolfage was wounded during the Iraq war in 2004.

Pushing back against online critics, We Build The Wall Inc. posted a video on Facebook that showed a factory producing steel bollards.

They wrote: 'Just when we thought that the fake news media couldn't get more ridiculously desperate, they're now proving how low they'll go by claiming that 'We Build The Wall' founder, Brian Kolfage, bought a yacht with the GoFundMe money.

Just weeks ago, Trump tweeted out his dissatisfaction with the project after the group built a section of wall just 35 feet from the Rio Grande river on the U.S.-Mexico border, leading to concerns about erosion and flooding.

'I disagreed with doing this very small (tiny) section of wall, in a tricky area, by a private group which raised money by ads,' Trump tweeted. 'It was only done to make me look bad, and [perhaps] it now doesn't even work. Should have been built like rest of Wall, 500 plus miles.'