FAT Brands Executives' Charges Dismissed by US Court

A US court has filed a motion to dismiss charges against FAT Brands CEO Andrew "Andy" Wiederhorn, the company, and two other individuals. The charges were related to alleged misconduct involving no victims, financial losses, or crimes. Wiederhorn's legal team has maintained his innocence since the beginning, and the US Attorney's Office has agreed to dismiss the indictment in the interest of justice.

The U.S. Department of Justice has moved to dismiss charges against Fat Brands Chairman Andy Wiederhorn, the company, and two other individuals. The charges, which were related to alleged misconduct involving no victims, financial losses, or crimes, have been dismissed in the interest of justice [1].

The U.S. Attorney’s Office filed a motion to dismiss the charges on Tuesday, which were initially brought last year. The charges accused Wiederhorn of concealing $47 million in illicit payments from Fat Brands to Wiederhorn, his family, or creditors [1]. Wiederhorn’s attorney, Nick Hanna, a former U.S. attorney for the Central District of California, stated that the decision to drop the charges is a reflection of the innocence that has been maintained since the beginning of the investigation [1].

The decision to dismiss the charges is controversial, with some questioning the motivations behind it. In April, Adam Schleifer, the assistant U.S. attorney handling the case, was fired at the request of the White House, according to the Los Angeles Times [1]. Schleifer alleged that the decision was motivated in part by the prosecution against Wiederhorn.

Wiederhorn has donated $28,577 to President Trump, the Republican party, and various GOP candidates since 2019, with two-thirds of that amount coming since 2023, after the start of the federal investigation into Wiederhorn’s tax issues [1]. Wiederhorn had not donated to a political candidate in 16 years before a $1,500 donation to Trump in 2019.

Fat Brands and Wiederhorn have maintained his innocence from the moment the investigation was first raised. Wiederhorn himself has suggested that he has been a target of federal prosecutors since he pleaded guilty in 2004 to tax charges and spent 16 months in prison [1].

The investigation into the loans and tax payments has been a cloud over Wiederhorn and Fat Brands for the past three years. During this period, Fat Brands stock has lost about half of its value [1]. Wiederhorn stepped aside as CEO, and the company replaced most of its board of directors with a new slate including several members of the Wiederhorn family in 2023 [1].

Fat Brands owns a controlling stake in several casual-dining chains, including Fazoli’s, Twin Peaks, Hot Dog on a Stick, Johnny Rockets, Great American Cookies, Smokey Bones, Round Table Pizza, Marble Slab Creamery, Hurricane Grill & Wings, Native Grill & Wings, Pretzelmaker, Elevation, Yalla Mediterranean, and Ponderosa and Bonanza [1].

References:
[1] https://www.restaurantbusinessonline.com/financing/feds-drop-charges-against-fat-brands-chairman-andy-wiederhorn