Fatburger CEO Suspected Of Tax Evasion And Money Laundering

By - February 23, 2022
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Fatburger’s CEO Andrew Wiederhorn is being investigated by the Department of Justice for money laundering, tax evasion, wire fraud, and securities fraud.

Federal authorities also are investigating whether his son, Thayer Wiederhorn, who appears on Real Housewives of Beverly Hills, is wrapped up in the alleged fraud.

Federal court documents obtained in February 2022 by the Los Angeles Times state that federal agents raided Thayer’s Beverly Hills home in December. Some of the items seized in the raid include digital storage devices, tax documents, other financial records, and cell phones.

Investigators also requested a federal judge issue a search warrant for Andrew Wiederhorn’s mansion. But the court documents didn’t make it clear if the federal search has been done yet. However, federal agents did surveil Wiederhorn as he walked his dogs near the home in 2021.

Not His First Tangle With the Law

Andrew Wiederhorn has been in trouble with the law before. In 2004, he was charged with paying a gratuity to a friend and also filing a phony tax return. Those crimes put him in prison for 15 months and netted him a $2 million fine.

But before Weiderhorn pleaded guilty, his firm, Fog Cutter Capital, gave him a $2 million bonus and kept paying him while he served time.

In the most recent case, a federal financial crimes investigator stated that Wiederhorn had devised a complex scam to avoid federal taxes. He’s also suspected of receiving millions of dollars in phony loans through his businesses.

The federal affidavit states that Wiederhorn and his children make credit card purchases that are paid out of the accounts for one of his companies, FAT Brands. The feds claim that a bill for $183,000 was paid for a London jeweler, as well as $150,000 for a down payment for a car. Another payment was made from the account for a divorce lawyer.

It is estimated that $5 million from FAT Brands and other companies paid for various family credit card balances from 2017 to 2019.

Possible False Tax Return Filing

The federal documents also say the feds are investigating whether the CEO filed a phony tax return in 2018. The 2018 tax return stated he has an income of $403,000 and the 2017 return claimed $395,000. But his car loan and home purchase applications in 2018 stated he made $200,000 per month.

The federal documents also note how Wiederhorn lives a luxurious lifestyle, indicated by a $24,000 bill for a hotel in Saint-Tropez. But he has been paying on several IRS installment agreements for 10 years to cover back taxes.

The most recent IRS agreement showed he still owed $3 million in delinquent taxes. Many question his extravagant lifestyle when owing the taxpayers so much money.

Documents also show that Wiederhorn received millions in rewards points from American Express by feeding money into his son’s Paypal account. This is most likely illegal because his son was routing company money into the account for no company reason.

One federal agent stated there’s sufficient probable cause that the burger CEO has engaged in many tax offenses, fraud offenses, and myriad misrepresentations to investors.

The federal court documents also note that Thayer Wiederhorn routed millions of dollars illegally through his Paypal account to obtain credit card points for the elder Wiederhorn.

The FBI reports a cost of $250,000 in fees to Paypal from $9 million that went from the Paypal account through a personal bank account and back to the company. The agent said there was no corporate reason for this other than to gain millions of travel rewards points.

Weiderhorn’s Attorney Denies Allegations

His attorney, Douglas Fuchs, told the LA Times last week that his client denies the allegations of the federal crimes and will show the federal government is wrong in time.

He also said the loans were legal and have been reviewed and approved. Fuchs said that his client’s tax returns were made by CPAs and that he is making payments as promised on an IRS tax agreement.

Fuchs also noted that he and his client haven’t been able to fully mount a defense against the allegations because the federal government hasn’t provided a copy of the affidavit.

Fatburger CEO Hails From Portland

Wiederhorn spent his childhood in Portland, Oregon, and first made his name as the president of a financial services company in the city. The firm focused on distressed debt and his stock in the company once topped $140 million.

However, Wiederhorn and his pension fund manager got in federal hot water when the company had financial issues. That’s when Wiederhorn was sent to federal prison for 14 months on federal tax charges.

Wiederhorn’s companies now cover 14 brands in various industries. He hasn’t been officially charged with a federal crime yet.

Attorney Geoffrey G. Nathan

About Geoffrey Nathan, Esq

Geoffrey Nathan is a licensed attorney in the Commonwealth of Massachusetts since 1988, admitted to practice in both Federal and State courts. He is a Boston criminal defense attorney with over 25 years of experience in felony, federal, and white-collar crimes. Board of Bar Overseers Number #552110