Andy Wiederhorn, former Fatburger CEO.
CNBC
The Justice Department is dropping its case against Fat Brands and its chair Andy Wiederhorn.
In May 2024, the company and Wiederhorn were indicted by a federal grand jury in Los Angeles on charges of wire fraud, tax evasion and other counts related to what prosecutors alleged was a “sham” loan scheme that netted Wiederhorn $47 million.
On Tuesday, federal prosecutors filed to dismiss all charges against Wiederhorn, two other people and the restaurant company that owns Fatburger, Johnny Rockets and Great American Cookies.
Wiederhorn maintained his innocence since he was indicted. He was previously convicted about two decades ago for filing a false tax return and paying an illegal gratuity to an associate, serving more than a year in federal prison.
“With this indictment behind us, I look forward to focusing on the continued growth and success of FAT Brands,” he said in a statement.
Wiederhorn stepped down as CEO of Fat Brands in 2023 after the company disclosed that the Securities and Exchange Commission was investigating him. Fat Brands and Wiederhorn haven’t resolved the separate civil complaint from the SEC stemming from the same alleged conduct that sparked the Justice Department charges.
Prosecutors also asked the federal court to dismiss separate criminal charges levied against Wiederhorn of being a federal felon in possession of a handgun and ammunition.
The reversal from the DOJ comes after the agency’s shakeup following the start of President Donald Trump’s second term. In March, the White House fired Adam Schleifer, the assistant U.S. attorney in Los Angeles who led the prosecution against Wiederhorn. Schleifer later alleged that his dismissal was the result of a smear campaign against him led by Wiederhorn.
Despite the turnover, Justice Department officials in California told The Oregonian in April that the prosecution against Fat Brands and Wiederhorn would continue.
Months earlier, the company donated $100,000 to Trump’s inauguration fund.
Shares of Fat Brands climbed 7% on Wednesday morning on the news. The stock has a market cap of less than $43 million.
