Sport Investors League
  • Politics
  • Stocks
  • Investing
  • Business

Sport Investors League

  • Politics
  • Stocks
  • Investing
  • Business
Business

Fatburger parent company, chairman charged in alleged fraud scheme

by admin May 13, 2024
May 13, 2024
Fatburger parent company, chairman charged in alleged fraud scheme

Federal authorities said Friday they charged Fat Brands and its chair, Andy Wiederhorn, of committing a brazen scheme that netted him $47 million in bogus loans from the restaurant company that owns Fatburger, Johnny Rockets and Twin Peaks.

Fat Brands, Wiederhorn and a few other people were criminally indicted by a federal grand jury in Los Angeles for wire fraud, tax evasion and other counts related to the alleged scheme.

In a separate civil complaint, the Securities and Exchange Commission accused the company and Wiederhorn of violations related to the same conduct.

“These charges are unprecedented, unwarranted, unsubstantiated and unjust,” Fat Brands counsel Brian Hennigan said in a statement. “They are based on conduct that ended over three years ago and ignore the Company’s cooperation with the investigation.”

Wiederhorn, who was convicted two decades ago in a criminal case that involved similar conduct, was separately criminally charged in an indictment in Los Angeles of being a federal felon in possession of a handgun and ammunition.

Andy Wiederhorn, chairman of Fat Brands.Jeffrey Neira / CBS via Getty Images file

“We look forward to making clear in court that this is an unfortunate example of government overreach — and a case with no victims, no losses and no crimes,” Wiederhorn’s attorney Nicola Hanna said.

As chief executive of Fat Brands, Wiederhorn, 58, allegedly directed the company to loan its own funds to him, with no intention of ever paying the “sham” loans back, according to the indictment.

The SEC alleges that Wiederhorn then used the cash to pay for private jets, first-class airfare, luxury vacations, mortgage and rent payments, and nearly $700,000 in “shopping and jewelry.”

Wiederhorn stepped down as CEO last year, following the company’s disclosure that the SEC was investigating him. In February, Fat Brands disclosed it had received a Wells Notice from the agency, meaning the SEC was planning to take action against it.

Wiederhorn’s alleged fraud accounted for roughly 44% of Fat Brands’ revenue from 2017 to 2021, which meant the company often wasn’t able to pay its bills. In those situations, Wiederhorn would allegedly redirect funds from credit cards paid for by Fat back to the company with assistance from his son Thayer, who was then the company’s chief marketing and is now its chief operating officer.

Fat Brands never disclosed the cash transfers as related party transactions to investors. In 2020, the cash transfers were written off after the company’s merger with Fog Cutter Capital Group, Fat Brands’ largest shareholder, which also happened to be majority owned by Wiederhorn, according to the SEC complaint.

Ron Roe, the company’s vice president of finance and former chief financial officer, and Rebecca Hershinger, another former CFO, were also named as defendants in the SEC complaint. Hershinger and tax advisor William Amon were also named in the indictment.

Additionally, as far back as 2006, Wiederhorn has owed taxes for his personal income to the IRS. He also didn’t report any of the so-called loans from Fat Brands as income, according to the indictment. As of March 2021, Wiederhorn owed $7.74 million to the IRS for his unpaid personal taxes.

Twenty years ago, he pleaded guilty to filing a false tax return and paying an illegal gratuity to an associate while leading Fog Cutter Capital. He paid a $2 million fine and spent more than a year in federal prison in Oregon. During his time in prison, Fog Cutter’s board opted to pay him a bonus equal to the fine and continued paying his salary, a decision that attracted widespread criticism.

This post appeared first on NBC NEWS

0
FacebookTwitterGoogle +Pinterest
previous post
Top 5 Stocks in “Go” Trends
next post
3 Top Weekly TSXV Stocks: Power Nickel Leads with 70 Percent Gain

Related Posts

Drone company’s stock soars after it appoints Donald...

November 29, 2024

Data center boom in world’s largest market isn’t...

May 3, 2025

A key to Biden’s lagging wind energy goal...

July 1, 2024

Investor convicted in Trump Media insider trading case

May 10, 2024

Delta says the Olympics will cost it $100...

July 13, 2024

Pepsi and Delta say consumers are hunting for...

July 12, 2024

How Trump could spare Biden’s renewable energy credits...

December 20, 2024

Trump Media lost $327.6 million in the first...

May 22, 2024

Why it seems like everyone you know is...

May 29, 2024

LongHorn up, Olive Garden down: Darden earnings hint...

June 24, 2024

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent

    • Bernie Sanders ripped after clash with GOP audience member over gov’t shutdown blame: ‘Just got wrecked’

      October 17, 2025
    • Trump reveals Arc de Triomphe-style monument for America’s 250th anniversary

      October 17, 2025
    • No 2 House Democrat says healthcare drives party’s strategy as shutdown heads into next week

      October 17, 2025
    • SOUTHCOM commander announces sudden retirement amid Trump drug war in Caribbean

      October 17, 2025
    • White House considers cash rewards for Gazans aiding search for slain hostages

      October 17, 2025

    Categories

    • Business (1,119)
    • Investing (3,270)
    • Politics (3,990)
    • Stocks (1,155)
    • About us
    • Contact us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: sportinvestorsleague.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 sportinvestorsleague.com | All Rights Reserved