30.07.2025 16:55

The Department of Justice (DOJ) has unexpectedly dropped all charges against Fat Brands, a restaurant company owning popular chains like Fatburger and Johnny Rockets, and its former CEO, Andy Wiederhorn. The indictment, handed down by a Los Angeles federal grand jury in May 2024, accused them of a complex scheme involving wire fraud, tax evasion, and other offenses, allegedly resulting in a $47 million illicit profit for Wiederhorn.

This surprising dismissal, filed on Tuesday by federal prosecutors, also exonerated two other individuals implicated in the case. Wiederhorn, who consistently proclaimed his innocence since the indictment, can now focus his efforts on the future of Fat Brands. He expressed relief and anticipation for the company's continued growth in a recent statement. This development follows Wiederhorn's resignation as CEO in 2023, a decision prompted by an ongoing SEC investigation into his conduct.

Significantly, the DOJ's decision comes amidst significant internal restructuring within the agency, following changes implemented during the Trump administration. The dismissal of Adam Schleifer, the assistant U.S. attorney who spearheaded the prosecution, in March, added another layer of complexity to the situation. Schleifer subsequently alleged that his removal stemmed from a smear campaign orchestrated by Wiederhorn himself. Despite earlier assurances from California DOJ officials to the contrary, as reported by an internet source, the charges were ultimately dropped.

However, the dismissal of the criminal charges does not resolve the separate civil complaint filed by the Securities and Exchange Commission (SEC), which also stems from the same alleged actions. Furthermore, the DOJ simultaneously dropped related criminal charges against Wiederhorn for illegal firearm possession. The complete reversal of the DOJ's stance raises questions about the investigation's integrity and the subsequent impact on the ongoing SEC proceedings.