A federal judge has ordered the U.S. Department of Justice to explain its decision to abruptly drop a high-profile tax fraud case against Andrew Wiederhorn, founder and chairman of Beverly Hills-based Fat Brands, which owns Fatburger and Johnny Rockets restaurants, after new reporting raised concerns about political interference.
Prosecutors had initially alleged that Wiederhorn, Fat Brands Chief Financial Officer Rebecca Hershinger and adviser William Amon carried out a $47 million tax scheme by disguising pay from the fast-food franchiser and its affiliate Fog Cutter Capital Group as fake shareholder loans. In 2024, a grand jury indicted Wiederhorn on tax evasion and wire fraud. Wiederhorn and his legal team deny any wrongdoing.
The Justice Department called Wiederhorn “a serial tax cheat,” alleging he spent disbursements on a private jet, cars and jewelry. But in a sudden reversal on July 29, prosecutors filed a one-paragraph motion to dismiss the charges.
“I am grateful to the U.S. Attorney’s Office for taking a fresh look at this case,” Wiederhorn said in a statement. “With this indictment behind us, I look forward to focusing on the continued growth and success of Fat Brands.”
Questionable timing
The move came after conservative pundit Laura Loomer and others took to social media to target the lead prosecutor in the Fat Brands case, former Assistant U.S. Attorney Adam Schleifer, whom Loomer called a “Biden holdover.” In April, Schleifer was fired over email “on behalf of President Donald J. Trump,” according to an appeal filed by Schleifer on April 25.
He maintains he was fired in part due to his involvement in the case against Wiederhorn, a Trump donor based on campaign finance data.
Now, U.S. District Judge R. Gary Klausner is calling the filing “inadequate.” In the order issued on Aug. 1, Klausner said the court “at the very least must know the prosecutor’s reasons” before approving the dismissal.
Critics have pointed to the timing of the dismissal and the involvement of Wiederhorn’s politically connected legal team – including former U.S. Attorney and former Trump-appointee Nicola Hanna – as evidence of political favoritism, the Los Angeles Times reported July 29.
The Justice Department initially opened the case under Hanna’s supervision before he departed from public service on Jan. 8, 2021, later joining Wiederhorn’s defense team, according to the appeal.
The dismissal coincided with Trump’s decision to reappoint Bill Essayli as U.S. attorney for the Central District of California, following a rocky tenure that centered largely around the Fat Brands case.
The Justice Department has not publicly responded to the order. Wiederhorn declined further comment through a company spokesperson.
