(CNN) — New York federal prosecutors on Thursday charged President Donald Trump’s former adviser Steve Bannon and three others with defrauding donors of hundreds of thousands of dollars as part of a fundraising campaign purportedly aimed at supporting Trump’s border wall.

Bannon, 66, was arrested on a boat Thursday off the Eastern coast of Connecticut according to a law enforcement official. He will make his initial court appearance in New York later Thursday, according to the US attorney’s office. Bill Burck, an attorney for Bannon, declined to comment.

The four men are indicted for allegedly using hundreds of thousands of dollars donated to an online crowdfunding campaign called We Build the Wall for personal expenses, among other things. Bannon and another defendant, Brian Kolfage, promised donors that the campaign, which ultimately raised more than $25 million, was “a volunteer organization” and that “100% of the funds raised…will be used in the execution of our mission and purpose,” according to the indictment unsealed Thursday.

But instead, according to prosecutors, Bannon, through a non-profit under his control, used more than $1 million from We Build the Wall to “secretly” pay Kolfage and cover hundreds of thousands of dollars in Bannon’s personal expenses. And Kolfage, according to the charges, used more than $350,000 of the donations for his personal use.

Bannon, Kolfage and the other two defendants, Andrew Badolato and Timothy Shea, are charged with one count of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering.

“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,” Acting Manhattan US Attorney Audrey Strauss said in a statement. “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.”

The indictment describes a slight-of-hand perpetrated by the defendants on donors to the We Build the Wall group. Within days of launching the group, Kolfage, along with Bannon and Badolato, made a “secret agreement” in which Kolfage would be paid “$100k upfront [and] then 20 [per] month,” according to the indictment. To disguise the transfer of the money to Kolfage, Bannon agreed to pass the payments through a non-profit he controlled, according to prosecutors, and in February 2019, Bannon and Badolato directed the non-profit to pay Kolfage $100,000 from We Build the Wall.

In February, CNN reported that We Build the Wall had communicated with the administration on plans to build a wall along the southern border and donate it to the US government.

Alyssa Farah, the White House director of strategic communications, declined to comment on the indictment Thursday morning.

A law enforcement official says officials at Justice Department headquarters were briefed in advance of the indictment of Bannon and others, but didn’t say when.

Justice officials have said Attorney General William Barr’s June ouster of Geoffrey Berman as Manhattan US Attorney was not related to the handling of any particular case.

Bannon’s history with Trump

Bannon was once an influential voice inside the White House as Trump’s chief strategist, until he was ousted by the President in August 2017.

He had helped run Trump’s 2016 presidential campaign, alongside now-White House senior adviser Kellyanne Conway, and was credited as a driving force behind Trump’s populist appeal, nationalist ideology and controversial policies.

Trump fired Bannon, furious from an interview in which Bannon was quoted contradicting Trump on North Korea and claiming he had authority to make personnel changes at the State Department.

He and the President had a falling-out in 2018 after Bannon was quoted calling an infamous 2016 meeting of a Russian lawyer, Donald Trump Jr., then-campaign chairman Paul Manafort and the President’s son-in-law Jared Kushner “treasonous.”

Before joining Trump’s campaign, Bannon was the former executive chairman of Breitbart, a right-wing news site that traffics in incendiary headlines, many of them outwardly racist, misogynist, anti-Semitic. Bannon returned to Breitbart after leaving the White House, but left again in 2018.

We Build the Wall controversy

We Build the Wall Inc., a group founded by Air Force veteran Kolfage, gained national attention after raising millions of dollars in a GoFundMe campaign, and launching two private wall projects in New Mexico and Texas. Those projects were constructed on private land — a strategy that largely shielded them from government intervention.

Kolfage has come under scrutiny for his inflammatory rhetoric and promises. In the past, he’s been accused by some of his donors as overpromising and underdelivering. Other allegations against him include being clandestine in his operations and unwilling to disclose certain logistics. He often uses his Twitter account to spar with or confront liberal critics. In the past, Kolfage has defended himself against criticism.

He previously told CNN that his group is a “game-changer for border security” and is “trying to make America safer.”

This story is breaking and will be updated.

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