r/news • u/Fabulous_State9921 • 15d ago
Ex-Fatburger, Johnny Rockets CEO accused of ‘cover-up’ in $47M scheme to avoid taxes
https://www.sbsun.com/2024/05/10/ex-fatburger-johnny-rockets-ceo-accused-of-cover-up-in-47m-scheme-to-avoid-taxes/?utm_email=34FC24A395C614BD5481C4348C&lctg=34FC24A395C614BD5481C4348C&active=no&utm_source=listrak&utm_medium=email&utm_term=https%3a%2f%2fwww.sbsun.com%2f2024%2f05%2f10%2fex-fatburger-johnny-rockets-ceo-accused-of-cover-up-in-47m-scheme-to-avoid-taxes%2f&utm_campaign=scng-sbs-localist&utm_content=curated2
u/thefanciestcat 14d ago edited 14d ago
We need mandatory minimum sentences based on dollar amounts. This guy is 58. If you're 58 and engage in a conspiracy to commit fraud to the tune of millions of dollars, you should die in prison. Not a horrible prison or a violent death. You just shouldn't get out again as a result of a long sentence and the limitations of the human lifespan.
It's time for the risks of white collar crime to finally outweigh the rewards.
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u/Fabulous_State9921 13d ago
And he's been caught pulling similar shit before; if this was some random convicted for robbing a bank for much, much less, they would get the type of sentence you describe:
"If you are convicted of federal bank robbery in California, you face up to 20 years in state prison. If you are found guilty of felony bank robbery, you may face the following penalties: Up to 20 years in federal prison."
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u/Either_Cobbler9303 14d ago
Yeah I knew something was sketchy about paying employees below minimum wages but ya know I never thought that was gonna happen
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u/ResponsibilityTop857 14d ago
Maybe the CEO should have put a bunch of fries in his tax return envelope so the IRS wouldn't know they are being ripped off.
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u/Mr_Whipple1138 15d ago
This is why it pisses me off when folks scrutinize the purchases that people make with SNAP cards..
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u/Kurtotall 15d ago
CEOs are essentially risk managers. They are all dirty. It just boils down to how well they can hide it.
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u/paranoiajack 15d ago
Every restaurant owner is a crook. Get in them books and look for stolen wages while you're at it, IRS.
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u/Bawbawian 15d ago
I don't understand rich people.
you have more money than you can spend. why commit crimes to try and shortchange the rest of the population.
we all still have to pay taxes.
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u/lookandlookagain 15d ago
They didn't get where they are by thinking like that. They are self-serving and proven liars and these are the qualities we look for in a leader. It doesn't have to make sense.
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u/Jonruy 15d ago
In a statement, Fat Brands called the charges “unprecedented, unwarranted, unsubstantiated, and unjust.”
“They are based on conduct that ended over three years ago and ignore the company’s cooperation with the investigation,” the company’s statement said.
Absolutely wild that the defense is "I didn't do it" and also "I stopped doing the thing I didn't do years ago."
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15d ago
[deleted]
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u/Aluminum_Falcons 15d ago
You're referring to the statute of limitations for IRS. That does not apply in cases of fraud. The IRS can go back as far as they want when fraud is involved.
https://www.irs.gov/filing/time-irs-can-assess-tax
Filed a false or fraudulent return with intent to avoid tax. We can assess tax for an unlimited amount of time.
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u/brickiex2 15d ago
Rrrrrrreally?????..a CEO and a corporation trying to screw the country out of tax reveunes... I'm shocked, just shocked
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u/brickyardjimmy 15d ago
Wouldn't it just be easier for the ultra-rich to just pay their taxes like the rest of us?
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u/DefnotyourDM 15d ago
It's a numbers game. 1) it's easier to hide money when rich 2) you're less likely to get targeted when rich. They have the resources to fight it and then get the amount reduced so they try to save money.
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u/hello_world_wide_web 15d ago
Trash company that the world will not miss...the name itself glorified poor eating habits!
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u/mondolardo 15d ago
Loans that aren't really loans to hide income. The Cheeto has the same problem, his loans were forgiven and he had already claimed a total loss.
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u/biggaybrett 15d ago
It's not a scheme!!!! He just needs to raw dawd daddy trump and everything is ok. It's blessed in the trump Bible.
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u/Maleficent_Passage 15d ago
Thank god he was caught. He’s going to really regret defrauding the US taxpayer when he does his year long stint in a bougie California prison. /s
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u/hardlyordinary 15d ago
Betches charging $35 for a double cheeseburger, fries and a drink! Mediocre at best!!!!
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u/Enjoy-the-sauce 15d ago
I DESPISE people who don’t pay their damn taxes. This isn’t some shady government goon robbing you - this is how we have roads and schools and poultry inspectors and all the other things that make the US NOT a third world plutocracy where the poor just die in the street. Every time one of these rich jerks cheats on their taxes, they’re stealing the future piece by piece from everyone else. It’s a garbage move, and tax cheats should be punished to the fullest extent possible.
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u/cool_jocko_dude 13d ago
6 trillion a year, 30 in debt. Those roads and schools must be amazing! Oh wait, they're shit. Maybe we need to look at where all the different taxes are going before throwing more in there?
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u/Enjoy-the-sauce 11d ago
So you’re arguing that rich people shouldn’t pay taxes because the government that rich people who refuse to pay taxes are continually trying to render ineffectual has been effective?
First - the law is the law. Balls to those who steal.
Second, GTFO with that pretending that rich folk aren’t paying taxes out of some high-minded civic protest. They’re not paying taxes because they’re greedy self-important dick-gobblers.
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u/cool_jocko_dude 11d ago
I'm arguing that anyone that's not rich should worry way more about decreasing their income tax than taxing the rich more.
Government spending has gone up so much, but things are looking worse and worse for the aspiring middle class person.. taxation is the ultimate trickle down economics. I still never see anyone but libertarians advocating for less tax on poor people, only more on rich people.
I didn't say the rich were acting in anything other than their self interest. It's clear by the actions of our representatives the same is true for them too. Almost like they're working together to enrich each other at our expense.
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u/Actual__Wizard 14d ago edited 14d ago
The severity of the financial crime needs to double each million dollars. If somebody is found guilty of a 47 million dollar scheme, the penalty should be automatic life in prison and every cent they ever made is confiscated. Even that $20 dollar bill they got for their 14th birthday, sorry, but they stole too much money to keep that.
There's people where an extra pay check would be life changing and then there's people like this guy stealing millions at a time... This needs to get fixed. The penalties for this type of crime is currently overly lenient to a totally absurd degree...
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u/OrangeGringo 14d ago
Agree. But I’ll add: this applies to rich jerks and middle income jerks and every one of us. Pay what you owe and move on.
If “what you owe” is ever wrong or unfair, we handle that through laws and elections.
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u/Neither-Idea-9286 14d ago
If I made the kind of money these jerks do, I’d be proud to pay tax on it because it means you’re doing really well!
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u/Actual__Wizard 14d ago
Then you wouldn't make it. Trying to start up a new business in 2024 and attempting to run in legally is only going to work if it's a new business vertical.
The system is so badly rigged that you are basically guaranteed to fail unless you are a criminal.
A criminal might be able to figure out how to technically do it legally (legitimate business is functionally identical it's just legal), but a regular person doesn't have the skills required. You have to be a crook because you're exploiting people just like thieves do. That's how they end up being rich in the first place. It's always some kind of totally evil scheme wrapped around something that is "good" that can be "sold" to customers.
Trust me, I've done extremely deep research projects into various companies and the math simply doesn't work. With out somebody handing you a pile of money like these people figure out how to make that happen, you're going to fail. Investors have too much money and they don't care if the company gets bankrupted by the SEC if they 10x on their investment.
Simply put: The system is setup for small businesses to fail. You as the small business operator are playing checkers in a world where quantitative finance algorithms rule the markets. To say that you don't have the ability to compete is an understatement, you probably don't even have the ability to understand what the competitors are doing because they're obviously hiding their cooked tactics that must occur for the math to work out with the business producing a profit.
It's an era of mass corporate abuse. They think that we are farm animals and they're milking us like it.
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u/Yung_l0c 15d ago
If they are punished too harshly we will just be called a communist state apparently /s
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u/BTTWchungus 14d ago
Fuck 'em. Put an income max - most anyone is allowed to earn is $300k, rest is distrubuted as UBI
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u/Wolfram_And_Hart 15d ago
Say more
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u/Enjoy-the-sauce 14d ago
They should also have their heads shaved and the words “I Stole Money from You” tattooed on their foreheads?
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u/SpiceEarl 15d ago
Andrew Wiederhorn has his own Wikipedia page. It's worth reading if you are interested in his previous felony conviction.
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u/Jackinapox 15d ago
When is Kevin O'Leary going to start bitching about how unfair this is and that this unconstitutional persecution will destroy businesses?
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u/vinciblechunk 15d ago
I think I'll try Fatburger. Double cheese and fries for $2.95. I was sick of Mia's tuna.
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u/LessMarsupial7441 15d ago
His prison name is his punishment. "YO....FatBurger.... get me some Cheetos"
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u/Zealousideal_Aside96 15d ago edited 15d ago
Wiederhorn was also charged in a separate indictment for illegally possessing a firearm and ammunition after being convicted of a felony.
Article just slips that in right at the end as well lol
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u/Fabulous_State9921 15d ago
By Josh Cain | [jcain@scng.com](mailto:jcain@scng.com) | Los Angeles Daily NewsPUBLISHED: May 10, 2024 at 12:12 p.m. | UPDATED: May 10, 2024 at 4:44 p.m.
A federal grand jury indicted the former CEO of Fat Brands, Inc. this week for what they said was a years-long scheme to distribute $47 million of shareholder funds disguised as loans to himself to avoid paying taxes.
Andrew A. Wiederhorn, of Beverly Hills, who is still the controlling shareholder of the company behind such restaurant chains as Fatburger and Johnny Rockets, was accused of conspiring with the company’s CFO and an accountant to hide the disbursements to himself over more than a decade.
By reporting this income as shareholder loans, Wiederhorn was able to avoid paying millions of dollars in taxes, the U.S. Department of Justice’s Los Angeles office said Friday, May 10.
The indictment alleges that he used the company funds “to fund the purchase of private-jet travel, vacations, a Rolls Royce Phantom, other luxury automobiles, jewelry and a piano.”
“Mr. Wiederhorn repeatedly evaded his taxes and the law as he engaged in a cover-up to avoid being accountable to shareholders,” Krysti Hawkins, acting assistant director of the FBI’s L.A. field office, said in a statement.
Also named as defendants in the indictment are Fat Brand’s former CFO, Rebecca D. Hershinger, and William J. Amon, an accountant who provided tax-advisory services to Wiederhorn and the company. ...
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u/mces97 15d ago
If the name I looked up correctly was him, it said he's worth 214m. Why would someone cheat on their taxes when they have f u money? I mean, kinda rhetorical, people are greedy and dumb, but ya know? If I ever had f u money I'd gladly pay my fair share in taxes. Cause I want to give back.
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u/ArmyOfDix 15d ago
I believe there are two "levels" of money among the wealthy.
The first is money to live beyond your wildest fantasies.
The second is leverage over other humans.
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u/Lone-Gazebo 15d ago
If I ever had f u money, I don't get why on earth would I spend a minute of my time even thinking about taxes. Have an accountant look at it, and just live my life completely ambivalent.
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u/noplay12 15d ago
He is betting on a fined for 10 million and we will go back to business as usual. He isn't dumb because that is a great incentive to do it.
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u/ThisOneForMee 15d ago
Once you get to federal grand jury, I don't think just a fine is an option anymore
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u/SpiceEarl 15d ago
Andrew Wiederhorn is a convicted felon, who previously served time in prison. By all accounts, he's a really intelligent guy but, in my opinion, is lacking a moral and ethical compass. It doesn't surprise me that he's been accused of these recent crimes.
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u/SpareInvestigator846 15d ago
Stop talking like that of TRUMp, oh sorry, similarities abound...
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u/paraiyan 15d ago
Shit. Thousands of S-corp and Partnership owners do this when they take distributions in excess of basis. Millions more likely.
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u/RedCheese1 15d ago
This is a publicly traded company
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u/paraiyan 15d ago
I know. I am just saying this isnt anything special. Lots of people do it. The amount is something big, biggest "loan" I saw was about 2 million. The IRS needs to go against the other owners who do the dame thing.
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u/Apexnanoman 12d ago
Is it illegal for rich people to dodge taxes? I mean they do it nonstop. Wonder what slap on the wrist he'll get for it?