Andrew Wiederhorn, CEO of Fatburger and Johnny Rockets parent company FAT Brands, is under investigation by federal authorities on allegations of securities and wire fraud, money laundering and attempted tax evasion. The feds are also looking into whether his son, Real Housewives of Beverly Hills in-law and FAT Brands exec Thayer Wiederhorn is involved in the alleged schemes.
According to court documents obtained by the Los Angeles Times, federal agents raided the Beverly Hills home of Thayer and wife Brooke Wiederhorn in December. Brooke is the daughter of RHOBH star Kim Richards. Although Brooke is not named in the filings, items seized from her and Thayer’s house include phones, digital storage devices, tax documents and other records.
Federal investigators also asked a judge for a search warrant for Andrew Wiederhorn’s Beverly Hills mansion, though it isn’t clear from the court documents if any search was conducted. Agents did surveil the 56-year-old Fatburger patriarch—who is also the largest FAT Brands shareholder—walking his dogs near the property last year.
Wiederhorn has had trouble with the law before. In 2004, he pleaded guilty in federal court to charges of paying an illegal gratuity to an associate and to filing a false tax return. That cost him 15 months in federal prison and a $2-million fine. The day before Wiederhorn pleaded guilty, however, his company, Fog Cutter Capital, paid him a $2-million bonus and agreed to keep him on the payroll through his prison stay.
In the current case, an FBI financial crimes investigator alleged in a November 2021 affidavit viewed by the Times that Wiederhorn had “devised and executed a fraudulent scheme” to avoid paying taxes, and that he received “millions of dollars in sham loans” through his companies.
The affidavit alleges that Wiederhorn, his children, and other relatives have for years made credit card purchases that were “paid primarily” out of accounts held by an affiliate of FAT Brands. Among Wiederhorn family charges the feds claim were paid out of FAT-affiliate accounts is a bill for $183,500 at a London jeweler, a $150,000 that was apparently a down payment for a Rolls-Royce, and $100,000 for a Beverly Hills divorce lawyer.
According to the filing, about $5 million from FAT Brands or its subsidiaries went to cover various Wiederhorn credit card balances from October 2017 to May 2019.
The documents also indicate that investigators are looking into whether Wiederhorn filed a false tax return in 2018, the Times reports. His 2018 tax return listed an income of $403,311 and his 2017 return reported $395,508. But in 2018 Wiederhorn also listed his income as $200,000 a month on applications for a car loan and home purchase, or about $2.4 million per year.
The affidavit cites Wiederhorn’s “luxurious lifestyle”—highlighting a $24,739 bill at Hotel Byblos in Saint-Tropez and $29,913 at Hotel Arts Barcelona. Meanwhile, Wiederhorn has entered into several IRS installment agreements in the last decade to pay back taxes. He is current on his latest IRS deal, documents show, but as of last November he still owed nearly $3 million in personal income taxes, penalties and interest.
The documents further allege that Wiederhorn generated millions of American Express rewards points by routing company money through his son’s PayPal account.
One FBI agent concluded in the filings that there was probable cause that Wiederhorn “engaged in the following criminal conduct,” including tax offenses, misrepresentations to investors, and fraud offenses “relating to personal expenses that Wiederhorn caused FAT… to pay.”
The court docs refer to Thayer Wiederhorn specifically in connection to an alleged scheme to route millions of dollars of company money through American Express charges to a PayPal account bearing his name—with the apparent goal of generating credit card rewards points for his father.
The FBI estimated a cost of more than $250,000 in fees to PayPal out of about $9 million that traveled “round trip” from Thayer Wiederhorn’s PayPal account, to his personal Bank of America accounts, and then back to FAT or its subsidiaries, according to the filings. An FBI agent wrote that those fees were spent “for no legitimate corporate purpose” other than “to further Wiederhorn’s fraudulent scheme.”
The status of the investigation is unclear, the Times states, and no charges have been filed against any person or against FAT Brands.
Wiederhorn’s attorney, Douglas Fuchs, said in a statement to the Times on Friday, “Mr. Wiederhorn categorically denies these allegations and at the appropriate time we will demonstrate that the government has its facts wrong. These loans were completely legitimate and were independently reviewed and approved. In addition, Mr. Wiederhorn’s tax returns were prepared and approved by independent tax professionals and he has been making payments under a plan approved by the IRS.”
Fuchs added, “We are unable to comment more specifically on the allegations because despite our requests, the government has refused to provide us with a copy of the affidavit.”
Beverly Hills-based FAT Brands said in a statement to the Times Friday: “The government has informed FAT Brands of its investigation and the Company is fully cooperating.”
A rep for the U.S. attorney’s office declined to comment to the Times, and a spokeswoman for the FBI office in L.A. said she could not confirm or deny an investigation.
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