Andy Wiederhorn, former Fatburger CEO.
CNBC
The Justice Division is dropping its case towards Fat Brands and its chair Andy Wiederhorn.
In Could 2024, the corporate and Wiederhorn have been indicted by a federal grand jury in Los Angeles on prices of wire fraud, tax evasion and different counts associated to what prosecutors alleged was a “sham” mortgage scheme that netted Wiederhorn $47 million.
On Tuesday, federal prosecutors filed to dismiss all prices towards Wiederhorn, two different individuals and the restaurant firm that owns Fatburger, Johnny Rockets and Nice American Cookies.
Wiederhorn has maintained his innocence since he was indicted. He was beforehand convicted about 20 years in the past for submitting a false tax return and paying an unlawful gratuity to an affiliate, serving greater than a 12 months in federal jail.
“With this indictment behind us, I stay up for specializing in the continued progress and success of FAT Manufacturers,” he stated in a press release.
Wiederhorn stepped down as CEO of Fats Manufacturers in 2023 after the corporate disclosed that the U.S. Securities and Alternate Fee was investigating him. Fats Manufacturers and Wiederhorn have not resolved the separate civil grievance from the SEC stemming from the identical alleged conduct that sparked the Justice Division prices.
Prosecutors additionally requested the federal court docket to dismiss separate felony prices levied towards Wiederhorn of being a federal felon in possession of a handgun and ammunition.
The reversal from the DOJ comes after the company’s shake-up following the beginning of President Donald Trump’s second time period. In March, the White Home fired Adam Schleifer, the assistant U.S. lawyer in Los Angeles who led the prosecution towards Wiederhorn. Schleifer later alleged that his dismissal was the results of a smear marketing campaign towards him led by Wiederhorn.
Regardless of the turnover, Justice Division officers in California told The Oregonian in April that the prosecution towards Fats Manufacturers and Wiederhorn would proceed.
Months earlier, the corporate donated $100,000 to Trump’s inauguration fund.
Shares of Fats Manufacturers climbed 7% Wednesday morning on the information. The inventory has a market cap of lower than $43 million.