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Fat Brands Chairman Andy Wiederhorn Accused of $47 Million Loan Fraud Scheme, Faces Federal Charges and SEC Complaint


Federal authorities have leveled serious allegations against Fat Brands and its chairman, Andy Wiederhorn, accusing them of orchestrating a fraudulent loan scheme totaling $47 million for Wiederhorn's personal enrichment. The indictment alleges that Wiederhorn, while CEO of Fat Brands, directed the company to issue sham loans to himself, with no intention of repayment, diverting funds for lavish personal expenses including private jets, luxury vacations, and jewelry. This indictment is accompanied by a civil complaint from the U.S. Securities and Exchange Commission (SEC), which claims that Wiederhorn's fraudulent activities comprised a substantial portion of Fat Brands' revenue, often leaving the company unable to meet its financial obligations.


The SEC further accuses Wiederhorn of concealing reportable income from various entities by mislabeling disbursements as shareholder loans. Wiederhorn and former CFO Rebecca Hershinger face charges including wire fraud, tax evasion, and certifying faulty financial reports. Additionally, Fat Brands itself is charged with extending credit to Wiederhorn in the form of personal loans. Notably, Wiederhorn has a history of legal troubles, having previously pleaded guilty to illegal gratuities and tax fraud in 2004. The repercussions of these recent allegations have already been felt in the financial markets, with Fat Brands' stock experiencing a sharp decline following the indictment announcement.

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