- Fat Brands confirmed CEO Andrew Wiederhorn and his family are under federal investigation in an 8-K filing with the SEC Tuesday. The filing follows a report by The Los Angeles Times on Saturday that Weiderhorn and actions by his son Thayer Weiderhorn, COO of Fat Brands, are being investigated for alleged money laundering, fraud, misrepresentations to investors and collection of "millions of dollars in sham loans," based on search warrants inspected by the publication.
- Fat Brands, which owns Fatburger, Johnny Rockets and Great American Cookies, is fully cooperating with federal law enforcement requests, but the restaurant company is not the target of the investigation, Fat said in an emailed statement to Restaurant Dive.
- In 2004, Wiederhorn pleaded guilty to two felony charges, payment of illegal gratuities and filing a false tax return, for which he served 15 months in federal prison and paid a $2 million fine.
The Los Angeles Times reports Andrew Wiederhorn used money from Fat Brands to pay for personal expenses. The publication also reports federal law enforcement raided the home of his son, Thayer Wiederhorn, under suspicion Andrew Wiederhorn moved company money through his son's PayPal account. Thayer is the chief operating officer at Fat Brands.
As of now, no charges have been filed against individuals or the company, but federal investigators have requested a search warrant for Andrew Wiederhorn's home, but it's unclear if a search has taken place.
The publication also reports roughly $5 million from Fat Brands or its subsidiaries was used to cover Wiederhorn's credit card balances between October 2017 and May 2019.
Andrew Wiederhorn's attorney, Douglas Fuchs of Gibson, Dunn & Crutcher, said Wiederhorn denies the allegations reported by the Los Angeles Times. Fuchs argues any loans involving Wiederhorn were legitimate and that Andrew Wiederhorn's tax documents had been appropriately prepared and filed by independent professionals.
"Despite our requests, the government has refused to provide us with a copy of the affidavit," Fuchs wrote in an email statement to Restaurant Dive. Beyond that, Wiederhorn's attorney wrote he is unable to comment on specific wrongdoing because the government has not provided a copy of the affidavit.
In its Tuesday 8-K filing, Fat Brands shared that U.S. attorneys and the SEC had requested, "documents and materials concerning, among other things, the Company's December 2020 merger with Fog Cutter Capital Group Inc., transactions between these entities and Mr. Wiederhorn, and compensation, extensions of credit and other benefits or payments received by Mr. Wiederhorn or his family."
"At this early stage, the Company is not able to reasonably estimate the outcome or duration of the government investigations," the company said in the filing.