FAT Brands Inc. (FAT) CEO Accused of Engaging in Fraudulent Tax Scheme and Obtaining Sham Loans
A shareholder filed a class action on behalf of persons and entities that purchased or otherwise acquired FAT Brands Inc. (NASDAQ: FAT) securities between December 4, 2017 and February 18, 2022, for violations of the Securities Exchange Act of 1934. Fat Brands purports to be a franchising company that acquires, develops, and markets quick-service, fast casual, and casual dining restaurants.
According to the complaint, on February 19, 2022, the Los Angeles Times published an article entitled “Family behind Fatburger under investigation for alleged fraud, money laundering, records show,” which revealed investigations into the Company’s CEO, Andrew Wiederhorn, and his COO son in connection with the Company. The article revealed that Wiederhorn had “devised and executed a fraudulent scheme” to avoid paying taxes and received “millions of dollars in sham loans” through his companies. The article also noted “an alleged scheme to route millions of dollars of company money through American Express charges to a PayPal account bearing [Thayer Wiederhorn’s] name.” This scheme generated $250,000 in fees to PayPal “for no legitimate corporate purpose.”
This isn’t the first time Andrew Wiederhorn has encountered legal trouble. In 2004, he pleaded guilty to charges of paying an illegal gratuity to an associate and filing a false tax return. He spent 15 months in prison and paid a $2 million fine.
On February 22, 2022, the Company filed with the SEC a Form 8-K announcing that the FBI had opened investigations in December 2021. On this news, FAT Brands stock fell.
Next Steps: If you acquired shares of FAT Brands Inc. (FAT) between December 4, 2017 and February 18, 2022, you have until May 17, 2022, to ask the court to appoint you lead plaintiff for the class. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. You do not have to participate in the case to be eligible for a recovery.
All representation is on a contingency fee basis. Shareholders pay no fees or expenses.