OPINION | The problems for Steve Bannon are just beginning

Trump reacts to the arrest of his former adviser Steve Bannon 0:35

Editor's Note: Elie Honig is a CNN legal analyst and a former federal and state attorney. The opinions expressed in this comment are yours. See more opinion at cnne.com/opinion

(CNN) - Thursday's federal indictment of Steve Bannon, former campaign adviser to President Donald Trump, is very bad news for Bannon, and potentially many others.

The US Attorney's Office for the Southern District of New York (SDNY) has charged Bannon and three other people with a massive fraud scheme. The defendants ran a crowdfunding campaign called We the People Build the Wall. His initial premise was that all donations would be given to the Federal Government to pay for the construction of the border wall, promised by Trump for a long time, between the United States and Mexico.

Instead, the indictment alleges, Bannon and his co-conspirators pocketed millions of dollars in donations and used that money to pay for their own lavish lifestyles and expenses, including "travel, hotels, consumer goods, and personal credit card debt." . Bannon has been arrested and his attorney declined to comment.

• LOOK: Steve Bannon, former adviser to Donald Trump, is arrested

The prosecution itself offers clues that the SDNY evidence is strong. The case appears to be largely document-based; SDNY apparently has the receipts. The indictment mentions that the evidence includes "false invoices and false 'vendor' agreements," as well as documents showing how the defendants created and used fictitious empty corporations to try to hide the flow of money from We the People Build the Wall in their own pockets.

From Bannon's perspective, it's one thing to defend a case that revolves around subtle issues of subjective intent, or that relies on the testimony of other co-conspirators. But it is much more difficult to defend a case based on black and white financial documents. A good defense attorney can question a witness and try to dismantle their story, but it is much more difficult to argue with false invoices and forged receipts.

The forecasts for Bannon are bleak. You can go to trial, of course, but the vast majority of federal trials result in a conviction. You can plead guilty and expect a slightly lower sentence than if you were convicted by a jury. In large part because of the amount of the alleged fraud - here, prosecutors say, more than $ 25 million - Bannon, if convicted, would face a sentence of at least about seven to nine years under federal sentencing guidelines (which are important, but not mandatory for a judge), or a little less if you accept responsibility and plead guilty.

• MORE: Federal Prosecutors Charge Steve Bannon and Three Others with Fraud in Border Wall Fundraising Campaign

Or Bannon may try to cooperate with the SDNY, which could offer him the best opportunity for a significant reduction in sentence. In my experience, SDNY handles cooperation differently than many other prosecutors. Some prosecutors allow a defendant to cooperate only against certain defendants (usually their defendant co-conspirators) or only on certain matters (usually the charge indicated in the original indictment). But at SDNY, cooperation is all or nothing. An SDNY contributor must admit to all crimes he has committed. And the cooperator must give up everything he knows about what others have done, even if the conduct, or the other people, goes beyond the original charges in the indictment.

If Bannon follows the cooperative route and is completely honest, he will stand up to minimize his own potential prison time. But, in order to save himself, Bannon will most likely need to give the SDNY the ammunition it needs to take out others as well.

Steve Bannon