Fired federal prosecutor claims ex-Fatburger CEO's 'smears' reached White House

Yahoo

03-05-2025

A former burger chain CEO under federal indictment on gun and fraud charges now faces another accusation: Allegedly spreading "smears" that reached the White House through conservative pundits, leading to the prosecutor who was handling his case getting fired.
The latest claim was leveled by Adam Schleifer, formerly an assistant U.S. attorney in Los Angeles, in a filing last week with the Merit Systems Protection Board, which handles wrongful termination appeals from federal workers.
Schleifer's filing called his dismissal "unlawful" and alleged it was motivated in part by his prosecution of Andrew Wiederhorn, the former chairman and chief executive of Fat Brands, which owns the Fatburger and Johnny Rockets restaurant chains.
Wiederhorn has maintained his innocence in the criminal cases, and his lawyers declined to comment on Schleifer's allegations.
Schleifer's recent filing included a one-line email in March, sent to him "on behalf of President Trump," notifying him he was being removed from his job.
Schleifer, who had publicly criticized Trump in years past when he was not employed as a prosecutor, claims he was fired for his "engagement in constitutionally protected political activity."
His firing, first reported by The Times, came an hour after right-wing activist Laura Loomer publicly called for it — a timeline Schleifer cited in his filing.
Read more: White House ordered firing of L.A. federal prosecutor on ex-Fatburger CEO case, sources say
The claim by the former prosecutor — who declined to comment when reached this week — drew a line between how the events unfolded and his work on the Wiederhorn case.
Wiederhorn was indicted last May on federal charges alleging a $47-million 'sham loan' scheme. He was also charged with illegally possessing a firearm and ammunition after being previously convicted of a felony. He has pleaded not guilty in both cases.
In his filing, Schleifer said he was fired on the basis of "smears, which originated with and were promoted by Mr. Wiederhorn, his defense team, and that of his codefendant FAT Brands, Inc."
Lawyers representing Fat Brands did not respond to a request for comment. The White House and the U.S. Department of Justice did not respond to inquiries.
Originally from Portland, Ore., Wiederhorn graduated from USC and, at age 21, founded the investment firm Wilshire Credit Corp. Billionaire philanthropist Eli Broad was one of his first financial backers, investing $300 million, according to a 2013 Times article.
In 1990, Wiederhorn moved back to Portland, where he founded investment company Fog Cutter Capital. According to The Times, Wiederhorn was worth an estimated $140 million by the late '90s.
In 2000, after Magic Johnson took an interest in Fatburger, Fog Cutter helped finance the change of ownership for the company, then bought a controlling stake three years later for $7 million.
Federal authorities began investigating Wiederhorn in the 2000s, allegedly for taking out shareholder loans without intending to repay them, according to an April government filing in the Central District of California opposing Wiederhorn's efforts to obtain evidence in the ongoing case.
The recent indictment against Wiederhorn alleged that he caused Wilshire Credit Corp. to issue him approximately $65 million in shareholder loans. Prosecutors have stated they plan to introduce evidence at trial later this year regarding those loans.
"The government investigated those loans in the early 2000s, and ultimately concluded it could not charge Mr. Wiederhorn with any crime because of overwhelming evidence he relied on at least two different tax advisors when reporting the loans on his tax returns and thus lacked the requisite intent to defraud," Wiederhorn's attorneys said in a recent pretrial motion.
Wiederhorn ultimately pleaded guilty in 2004 to charges of paying an illegal gratuity to his associate and filing a false tax return. He spent 15 months in prison and paid a $2-million fine.
The day before Wiederhorn's plea, Fog Cutter awarded him a $2-million bonus and agreed to keep paying him during his incarceration.
The arrangement prompted New York Times columnist Nicholas Kristof to bestow on Wiederhorn his inaugural 'award for greed,' writing: 'I can't think of a board that has ever so disgraced the principles of corporate governance by overpaying a CEO even as he sits in prison.'
Wiederhorn previously told The Times that his attorneys had advised him that his actions were legitimate business deals.
Upon his release from prison in 2005, Wiederhorn became chief executive of Fatburger. He went on a public relations campaign to restore his and his family's reputations, including an appearance on 'Undercover Boss' at a Fatburger restaurant in Mesa, Ariz.
"I've always adamantly denied doing anything wrong intentionally,' Wiederhorn told The Times in 2017. "I'm very grateful for it. I felt like I paid the fine. I did the time. I did everything I was supposed to do to make this go away and put it behind me."
The latest federal investigation into Wiederhorn began around 2021 and involved a dawn raid on his home that December.
Based on an affidavit alleging the CEO had engaged in tax and wire fraud, authorities searched the residence and found a pistol and ammunition in his closet, according to court filings.
Wiederhorn is banned from possessing firearms because of his past conviction. At a court hearing last month, Wiederhorn's defense team told the judge the gun belonged to one of his sons.
In 2023, Wiederhorn publicly announced he was stepping down as CEO, framing it as a way to "eliminate the distraction" of the ongoing federal probe. Weeks later, according to federal authorities, Wiederhorn 'removed every director other than himself' from the board of Fat Brands and 'reconstituted' a new board with directors 'under his control." The board now includes three of Wiederhorn's children.
Last year, in May, a federal grand jury indicted Wiederhorn over an alleged $47-million "sham loan" scheme, which prosecutors say dates to 2010. Authorities accused Wiederhorn of evading millions in taxes by hiding his true income.
Read more: Ex-Fatburger boss used company funds for Rolls-Royce and other luxuries in $47-million scheme, indictment says
Company money — categorized as 'shareholder loans' — was allegedly disbursed to Wiederhorn and his family 'for their personal benefit,' according to the indictment. Some of that money went toward private-jet travel, ski trips, a Rolls-Royce Phantom and other luxury automobiles, a jewelry collection and a baby grand piano, federal prosecutors say.
According to the indictment, Wiederhorn 'had no intention of repaying these sham 'loans.' '
The indictment cited a September 2020 email, in which Wiederhorn said that in addition to his disclosed annual salary of approximately $400,000, he received "$3m-4m of distributions from my company as loans, then periodically the company forgives those loans."
'Mr. Wiederhorn consulted and followed the advice of world-class professionals in all of his business dealings,' Nicola Hanna, Wiederhorn's attorney, previously told The Times. 'We look forward to making clear in court that this is an unfortunate example of government overreach — and a case with no victims, no losses and no crimes.'
Wiederhorn was allegedly assisted by the company's former chief financial officer, Rebecca D. Hershinger, and his outside accountant, William J. Amon, who were also charged in the 22-count indictment. Both have pleaded not guilty.
Fat Brands has also been charged.
Brian Hennigan, counsel for Fat Brands Inc., previously told The Times the charges were 'unprecedented, unwarranted, unsubstantiated and unjust."
Schleifer, whose father is the co-founder and chief executive of Regeneron Pharmaceuticals, started with the U.S. attorney's office in 2016. He prosecuted drug trafficking and fraud cases before quitting in 2019 to run for an open congressional seat in New York's 17th District.
During his congressional bid, in which he finished second in the Democratic primary, Schleifer on social media attacked Trump's tax policies and behavior toward federal investigators.
In one 2020 tweet, Schleifer accused Trump of eroding constitutional integrity 'every day with every lie and every act of heedless, narcissistic corruption.'
In his filing last week contesting his firing, Schleifer referred to his postings on social media as "First-Amendment-protected political advocacy."
According to the filing, it was Wiederhorn's lawyer Hanna — then serving as U.S. attorney appointed by Trump — who rehired Schleifer in 2020. After his return to the federal prosecutor's office in L.A., Schleifer was assigned an ongoing investigation of Wiederhorn and others.
In the recent challenge to his firing, Schleifer accused Wiederhorn and his defense team of commissioning a tabloid news article attacking his work and urging officials to remove him from the case and his job as a prosecutor.
Schleifer also alleged in his filing a March 17 meeting held between the U.S. attorney's office and Wiederhorn's counsel, including Hanna, in which the latter allegedly "sought Mr. Schleifer's removal from the cases on the mistaken, unethical, and improper grounds that his and the Office's work on those cases reflected a 'woke,' 'DEI,' and 'Biden' bias."
Read more: Trump's axing of L.A. federal prosecutor part of broader war on perceived legal enemies
At the meeting, according to the filing, the defense team brought up Schleifer's critical comments about Trump on social media. Schleifer accused Wiederhorn and his defense team of providing those same social media posts to White House officials and other "tabloid and 'citizen' journalists."
Schleifer alleged he was removed from his position "on the basis of these smears."
Wiederhorn's securities fraud trial is scheduled for Oct. 28.
His lawyers successfully argued for a continuance in the firearms case, citing the fact that the 9th Circuit Court of Appeals is reviewing a ruling on gun rights for nonviolent convicted felons.
The trial is set for Jan. 20, 2026.
Times staff writers Matt Hamilton and Laura J. Nelson contributed to this report.
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This story originally appeared in Los Angeles Times.