Former Fat Brands CEO Indicted in Alleged Tax Evasion Scheme
The U.S. Department of Justice has brought charges against Andrew Wiederhorn, the former CEO of Fat Brands, parent company to well-known burger chains Fatburger and Johnny Rockets. Wiederhorn faces allegations of conducting a tax evasion scheme that spanned over a decade, from 2010 to early 2021. Officials claim he misappropriated approximately $47 million in shareholder loans for personal use, which were neither repaid nor correctly reported, purportedly to dodge millions in tax liabilities.
According to the indictment, these funds were falsely categorized as loans rather than compensation, which was not disclosed to the IRS, SEC, or investors. Wiederhorn, who remains the controlling shareholder of Fat Brands, is also accused of possessing a firearm as a felon.
“This defendant…is alleged to have engaged in a long-running scheme to defraud investors and the United States Treasury,” stated United States Attorney Martin Estrada. Estrada highlighted the betrayal of shareholder trust, describing the company’s funds as Wiederhorn’s “personal slush fund.”
Rebecca D. Hershinger, former CFO of Fat Brands, and the company’s accountant have also been named in the indictment. The company itself is facing charges and has responded strongly to the allegations, denouncing them as “unprecedented, unwarranted, unsubstantiated, and unjust.”
Fat Brands maintains that the charges are based on past conduct and overlooks the cooperation provided during the investigation. Wiederhorn is charged with obstruction of the administration of the Internal Revenue Code, multiple counts of tax evasion, making false statements, and wire fraud among other offenses. Both Wiederhorn and Hershinger face additional charges related to wire fraud and certifying inaccurate financial reports.
The case brings to light the serious consequences of financial misconduct at the executive level and underscores the government’s commitment to prosecuting tax evasion and corporate fraud.
