The Trader Harbor
  • Business
  • Politics
  • World News
  • Stocks
  • Business
  • Politics
  • World News
  • Stocks

The Trader Harbor

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
Apple’s Maryland store workers vote to authorize strike
next post
Israel-Hamas war would ‘probably already been over’ if Trump were president, Sen. Tom Cotton says

Related Posts

Egg prices are falling, with a dozen now...

March 15, 2025

Nvidia says Anthropic is telling ‘tall tale’ in...

May 2, 2025

Dow rises 200 points to close at a...

July 18, 2024

Kroger and Albertsons are spending billions to reward...

December 15, 2024

Boeing is in talks to reacquire fuselage maker...

March 5, 2024

Nike pushes back Skims launch with Kim Kardashian...

June 20, 2025

Disney tops quarterly profit estimates, but starts to...

February 6, 2025

Musk says he’s sending Starlink tech to FAA...

March 3, 2025

‘Absurd’: NTSB chair blasts Boeing for failing to...

March 8, 2024

Microsoft confirms performance-based job cuts across departments

January 11, 2025

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


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

    Latest

    • The Real Drivers of This Market: AI, Semis & Robotics

      August 31, 2025
    • S&P 500 Breaking Out Again: What This Means for Your Portfolio

      August 31, 2025
    • Epstein estate to hand over ‘birthday book’ to lawmakers, House Dem says

      August 31, 2025
    • Dyan Cannon denied White House entry after lying about her age on passport documents

      August 31, 2025
    • Israel eliminates Houthi prime minister in Yemen airstrike targeting senior government officials

      August 31, 2025
    • Sen. Bernie Sanders calls on RFK Jr. to resign following departure of CDC officials

      August 31, 2025

    Categories

    • Business (1,370)
    • Politics (4,370)
    • Stocks (1,619)
    • Uncategorized (45)
    • World News (1,363)
    • About us
    • Contact us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: TheTraderHarbor, 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 thetraderharbor.com | All Rights Reserved