If you are a high-net worth individual, you need to be very careful about how you pay for your divorce attorney. There are complex laws regarding when and how corporations can pay for divorce-related legal fees, and you need to be very careful about how you approach this situation. If the company is publicly-traded, the situation becomes even more complex. Remember, a corporation is seen as a separate entity, and all business decisions are subject to approval from the appropriate shareholders. If you simply go ahead and use corporation funds to pay for an expensive divorce lawyer without clearly notifying the necessary authorities, you could face serious legal consequences. Things can become even worse if you intentionally try to hide these financial transactions.
This was a lesson recently learned by CEO Andrew Wiederhorn, whose company owns popular restaurant chains like Fatburger and Johnny Rockets. His family is being investigated by federal agents for wire fraud, money laundering, and tax evasion. The FBI is accusing him of creating a “fraudulent scheme” to avoid taxes. He also reportedly received millions of dollars in what federal agents are calling “sham loans” through his various companies.
Credit card records show that he, his children, and his various relatives used funds from a publicly-traded affiliate of FAT Brands to pay for all kinds of frivolous expenses that were clearly not work-related. These included almost $200,000 in jewelry, a Rolls-Royce, and last but not least, a divorce attorney in Beverly Hills who apparently cost one of the Wiederhorns $100,000.
It is worth mentioning that no charges have actually been filed against Andrew or any other member of his family, and the investigation is still ongoing. His attorney has of course denied all of the allegations made against him, and a fierce legal battle is set to follow. Wiederhorn maintains that the loans he received from his own companies were completely legitimate, and that his tax returns were prepared in accordance with IRS regulations by trained professionals.
This is not the first time Wiederhorn has dealt with legal issues. In 2004, he was sentenced to 15 months in federal prison for filing a false tax return. He also paid a $2-million fine. However, his company at the time paid him a $2-million loan, essentially negating these losses while also agreeing to continue paying his salary even while he was incarcerated.
FBI Raids Wiederhorn’s Son’s Home
These latest legal issues have affected Wiederhorn’s family, including his son, Thayer Wiederhorn. Thayer married a woman named Brooke Brinson, who is the daughter of the well-known TV personality Kim Richards, who appeared frequently on The Real Housewives of Beverly Hills. Brooke is also the cousin of Paris and Nicky Hilton. The FBI searched Thayer and Brooke’s home, confiscating phones, storage devices, tax documents, and other evidence. Thayer apparently participated in his father’s schemes by allowing him to funnel money through his PayPal account. As of right now, there is no real indication of how deep the rabbit hole goes. Because the FBI has suggested that Wiederhorn’s extended family may have been involved in this scheme, some of America’s most prominent reality TV stars may be implicated in some way.