Bannon’s Fate May Be Tied to Pal Who Taped Accused Mobster

[SolarSolano]

Bannon’s Fate May Be Tied to Pal Who Taped Accused Mobster
By David Yaffe-Bellany and Christian Berthelsen
Bloomberg
September 1, 2020

When his dealings with a loan shark turned ugly in 2008, Andrew Badolato sought the help of the FBI, agreeing to record calls as the government built a case against a man it said was involved in organized crime.

Around the same time, Badolato, a longtime business partner of President Donald Trump’s former campaign chief Steve Bannon, assisted with a second case, providing information that helped prosecutors send one of his associates to prison for securities fraud.

Now the Sarasota, Florida, businessman is at the center of a third criminal case -- this time as a defendant. Federal prosecutors have accused him of conspiring with Bannon and two others to siphon hundreds of thousands of dollars from a campaign to raise funds for a border wall between the U.S. and Mexico.

On Monday, Badolato pleaded not guilty before a federal judge in New York and was released on bail. Disabled military veteran Brian Kolfage, who founded the campaign, Colorado businessman Timothy Shea and Bannon have also denied wrongdoing.

Badolato’s history of assisting federal investigators raises the prospect that he could turn on Bannon after years of collaboration, according to interviews with former prosecutors who aren’t involved in the case. Before the wall-building project, the two worked together on penny stock deals and political documentaries that have likely given Badolato insight into Bannon’s affairs.

“The two of them knowing each other well is an important piece for a cooperator,” said Harry Sandick, a former federal prosecutor in New York. “You want someone who can say, ‘I’ve known this person for years, and this is what we did together.’”

Badolato’s lawyer declined to comment on the case or his defense strategy. Lawyers for the other three defendants didn’t respond to calls and emails seeking comment. A spokesman for Acting U.S. Attorney Audrey Strauss in New York declined to comment.

If Badolato, 56, were to reach a formal cooperation deal with prosecutors, he would be seeking leniency from the government in return for his testimony at a trial or for providing additional evidence against his co-defendants. In a 2018 profile, the Sarasota Herald-Tribune reported that a former business associate, Joseph Barquin, said Badolato taped his phone conversations with Bannon and other right-wing figures. Barquin didn’t respond to calls about any such tapes, and Badolato’s attorney didn’t respond to a question about Barquin’s claim.

The wall-building case centers on a nonprofit, We Build the Wall Inc., that Kolfage advertised as a way to circumvent the bureaucracy and litigation slowing the president’s own project. Badolato played a pivotal role, helping Bannon take control of the group’s finances and embezzle donations, prosecutors say. The charges rely on extensive text-message exchanges between Bannon and Badolato.

For his part in the alleged scheme, Badolato faces as long as nine years behind bars if convicted, estimates Jennifer Rodgers, a former prosecutor and a lecturer at Columbia Law School.

“That’s an incentive to cooperate,” she said.

Badolato and Bannon go back a long way. In the early 2000s, they helped orchestrate the public stock offering of a nasal-spray manufacturer called SinoFresh. Bannon, who served as a director of the company, sued other board members for self-dealing and fraud after they moved to oust him. The case ultimately settled. Badolato wasn’t named as a defendant.

Later, Badolato wrote for Breitbart News, where Bannon served as the executive chairman, and was credited as an associate producer on political documentaries Bannon spearheaded, including “Clinton Cash.”

But it was his roles in a pair of criminal cases that led to Badolato’s assisting the Federal Bureau of Investigation.

In 2008, Badolato took out $12,500 in loans at more than 500% interest from Louis Caputo, a former minor league baseball player who prosecutors claimed had ties to organized crime, according to federal court records in Florida. When Badolato failed to make payments, Caputo, who said he had “connections” to the Gambino and Trafficante crime families, became threatening, prosecutors said.

“I’m the wrong f-----’ guy to be slick with,” he told Badolato, according to the records.

Working with the FBI, Badolato recorded phone conversations with Caputo, according to a person familiar with the case. Caputo, who died in 2014, pleaded guilty to extorting Badolato and was sentenced to prison.

In 2012, Badolato told a federal judge that he had assisted the FBI in a prosecution involving a brokerage that was running pump-and-dump schemes in penny stocks, according to court papers. Badolato had enlisted two brokers to sell 3 million shares of a biotech company he owned, and the brokers took steps to bribe middlemen to sell the shares, prosecutors said. After an FBI sting, prosecutors in Manhattan charged the brokers, Jonathan Curshen and Bruce Grossman, with fraud and bribery.

“I provided records to the, you know, FBI in 2008,” he told a judge in a hearing in an unrelated lawsuit, according to a transcript. “I was interviewed, not only provided additional documents, but other -- reported additional crimes to the -- I guess, you know, the FBI representative.”

Read More: Bannon Charged With Fraud Over Border Wall Group

Badolato wasn’t accused of wrongdoing, but Curshen said in his guilty plea that he had “conspired” with Badolato and others.

Messages left for Curshen, his lawyer in that case and Grossman, who also pleaded guilty, weren’t returned.

For years, Badolato had been friendly with Curshen, whom he met in the late 1980s. He was “a real character,” said Curshen’s sister, Caroline Brown, who was friends with Badolato and his ex-wife.

In recent years, Badolato worked with Bannon on a nonprofit, Citizens of the American Republic, that was founded to promote “economic nationalism,” and helped him take over We Build the Wall, according to prosecutors. Text messages included in the indictment show the pair agreeing to advertise the wall-building organization as an entirely charitable effort even as they allegedly embezzled funds.

By pitching the campaign as a volunteer project, Badolato said in one text to Bannon, they would “remove all self-interest taint.”

(Updates with details about Caputo in paragraph below first Read More line.)

[sdeitche]

Never heard of this Caputo guy. Need to dig a little. Claims he was with the Trafficantes?