Latest news with #ex-Fatburger
Yahoo
03-05-2025
- Business
- Yahoo
Fired federal prosecutor claims ex-Fatburger CEO's 'smears' reached White House
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. Sign up for Essential California for news, features and recommendations from the L.A. Times and beyond in your inbox six days a week. This story originally appeared in Los Angeles Times.
Yahoo
01-04-2025
- Politics
- Yahoo
Trump's axing of L.A. federal prosecutor part of broader war on perceived legal enemies
When the White House fired a federal prosecutor last week in Los Angeles, it could've been dismissed as an isolated case, with the administration targeting a one-time Democratic congressional candidate who had slammed President Trump on the campaign trail. But in the days since, it's become clear the dismissal is part of a broader campaign against Trump's perceived enemies that has roiled the Justice Department and some of the nation's highest-powered law firms. Last Friday, the White House terminated Adam Schleifer, an assistant U.S. attorney on the corporate and securities fraud strike force who had been leading an investigation into a pro-Trump business executive. After The Times reported on the matter, White House Press Secretary Karoline Leavitt issued a statement that said the Justice Department had eliminated at least 50 U.S. attorneys and deputies nationwide in the past few weeks. Read more: White House ordered firing of L.A. federal prosecutor on ex-Fatburger CEO case, sources say "The American people deserve a judicial branch full of honest arbiters of the law who want to protect democracy, not subvert it," Leavitt said. Leavitt did not explain how those fired were allegedly subverting democracy, and White House officials didn't respond to requests for more information. Trump has authority over federal prosecutors because U.S. attorney's offices are part of the Department of Justice, which falls under the executive branch, not the judicial branch. While it is normal for U.S. attorneys, who are political appointees, to resign or be forced out when a new administration takes power, several lawyers said line prosecutors like Schleifer are career employees who can only be terminated for poor performance or misconduct. By firing an individual prosecutor with an email that sources said was "on behalf of President Donald J. Trump," the White House took a norm-shattering step that might be illegal and could cripple the independence of individual prosecutors throughout the Department of Justice if repeated, according to several current and former prosecutors. The sources familiar with Schleifer's firing, along with several others who spoke to The Times, requested anonymity citing concerns about backlash. The White House and U.S. Department of Justice have not said exactly why Schleifer was fired. Both Schleifer and the U.S. Attorney's Office in Los Angeles declined to comment. Multiple federal law enforcement sources said they suspect Schleifer's firing was tied to critical comments he made about Trump during his congressional campaign and his prosecution of a fast-food CEO who donated roughly $40,000 to Trump and Republican causes in recent years. Connie Woodhead, a 30-year veteran of the Department of Justice and former first assistant U.S. attorney in the office where Schleifer worked, called the circumstances of his departure "unprecedented." 'I think it's extremely chilling... especially without further explanation, for any assistant U.S. attorney charging anyone who might be a friend of the [Trump] administration, or a donor to the administration," she said. Read more: Trump wants to rein in federal judges. One California Republican is already working on it Trump's team has made no secret of his intention to rid the government of employees who have challenged the president or his allies and their interests. An hour before Schleifer was fired, Laura Loomer, who has at times served as an advisor to Trump, began calling for his ouster on social media. Loomer later celebrated the firing on X on Saturday, stating that "Biden holdovers who openly express bias against President Trump" should all be fired. The job of assistant U.S. attorney is not typically glamorous, involving the mundane but crucial legal grunt work of prosecuting all manner of federal crimes, ranging from white-collar scams to international narcotics conspiracies and public corruption. It has been a career launching point for many prominent legal figures, with major law firms frequently poaching the top talent. Retaining the best prosecutors, whose casework is largely apolitical, has been a longstanding challenge for the government. Several former federal prosecutors said the firing of an assistant U.S. attorney would normally be a laborious process that involves the employee's supervisor and higher-ups at their district office. A prosecutor might be put on a "performance improvement plan," for instance, before termination was even considered. 'Career prosecutors who are past their probationary status have public service protections. That ordinarily means that before one of them could get fired, there would be a long, well-documented process," said Carley Palmer, a former supervisor in the federal prosecutor's office in Los Angeles who is now a partner at Halpern May Ybarra Gelberg LLP. "To fire someone who is past their probationary period is hard to do." Multiple sources told The Times over the weekend that Joseph T. McNally, the acting U.S. attorney for Los Angeles, was not involved in the decision to terminate Schleifer. The sources, who were not authorized publicly and feared reprisals, suspected Schleifer's firing was motivated, in part, by a case he was assigned involving Andrew Wiederhorn, former chief executive of the company that owns fast-food chains Fatburger and Johnny Rockets. A grand jury indicted Wiederhorn last May on charges that he hid taxable income from the federal government by disbursing 'shareholder loans' from the company to himself and his family, money which was then used for personal gain. He has pleaded not guilty. Wiederhorn's lawyers have aggressively pushed Justice Department officials to drop the case, according to two sources. The case against Wiederhorn, who donated approximately $40,000 to Trump's political action committees and the Republican National Committee in the last two years, is still pending in federal court. The defense team did not respond to a request for comment following Schleifer's dismissal. Beyond the Wiederhorn case, there are also concerns that Schleifer was targeted for political reasons. Schleifer made several unflattering remarks about Trump when he ran for an open congressional seat in New York's 17th District in 2020. In one 2020 tweet, Schleifer accused Trump of eroding constitutional integrity 'every day with every lie and every act of heedless, narcissistic corruption.' One of Schleifer's former colleagues said that despite his political ambitions outside the office, he focused only on the law when he came to work. 'He is very smart. He's hardworking. And he is impartial. He judges cases based on the evidence," Woodhead said. 'He was apolitical in the office.' Schleifer left his post during his 2020 political campaign but was hired back to the office ahead of Biden's inauguration in 2021 by former U.S. Atty. Nicola Hanna, a Trump appointee. Hanna is now part of Wiederhorn's defense team. None of Wiederhorn's attorneys have responded to requests for comment from The Times. Schleifer's firing appears to be just the latest case roiling the Justice Department. Reagan Fondren, the acting U.S. attorney for the Western District of Tennessee, was also fired recently in a one-line email from the White House, according to the Daily Memphian. Fondren could not immediately be reached for comment. Adam Cohen, director of the Organized Crime Drug Enforcement Task Forces, wrote last month on LinkedIn that he was abruptly fired after more than 26 years pursuing "old school mobsters, street gang members, cartel bosses, terrorists" and others for the Justice Department in Washington. "Putting bad guys in jail was as apolitical as it gets," Cohen wrote. "I served under five Presidents and 11 Attorneys General… my personal politics were never relevant." Read more: California vs. Trump: What it's like to be the attorneys on the front lines In January, more than a dozen prosecutors were fired after working on criminal cases against Trump. That included Gregory Bernstein, who worked in the Major Frauds Section of the U.S. attorney's office in L.A. Bernstein had previously aided special counsel Jack Smith's investigation into allegations that Trump mishandled classified documents after leaving office and fostered an insurrection with lies about the results of the 2020 election. Bernstein declined an interview request. The special counsel prosecutors each received a letter from the Justice Department stating that given their "significant role" in prosecuting Trump, "I do not believe that the leadership of the Department can trust you to assist in implementing the President's agenda faithfully." Those attorneys have since retained counsel and challenged the legality of the firings through an appeal to the Merit Systems Protection Board, which bills itself as an independent, quasi-judicial agency in the executive branch. Palmer said if the board doesn't overturn Schleifer and Bernstein's firings, they will likely have to sue in federal court to get their jobs back. Jack Smith was among hundreds of former Justice Department lawyers who signed a February open letter to career federal prosecutors that expressed "alarm" over recent actions by the department's leadership. The letter followed the Justice Department's order to dismiss corruption charges against Eric Adams, the mayor of New York, despite high-level prosecutors from both ends of the political spectrum resigning in protest of that order. "We were taught to pursue justice without fear or favor, and knew our decisions to investigate and charge should be based only on the facts and the law," the letter stated. "We knew these values were more than just requirements in a manual — they were foundational to a fair and just legal system. And we upheld them no matter who was President." Current and former federal prosecutors have raised concerns over the ability of fired federal prosecutors to find work in the private sector after Trump issued several executive orders targeting firms who had ties to some of his political enemies, including ex-special counsel Robert S. Mueller III and Hillary Clinton, his opponent in the 2016 election. Although district court judges have ruled some of the Trump orders targeting law firms are likely unconstitutional, some firms have sought to appease him. Paul, Weiss, Rifkind, Wharton & Garrison LLP — which has a partner that once tried to build a criminal case against Trump while working at the Manhattan district attorney's office — agreed to contribute $40 million in legal services to causes Trump supports, including 'the President's Task Force to Combat Antisemitism, and other mutually agreed projects.' The firm, which reportedly employs about 2,000 people, also agreed to audit its hiring practices and pledged to "not adopt, use, or pursue any DEI policies.' Sign up for Essential California for news, features and recommendations from the L.A. Times and beyond in your inbox six days a week. This story originally appeared in Los Angeles Times.
