August 30, 2004
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Andrew Wiederhorn
Rogue of the Week
COLUMN
Andrew Wiederhorn
Back in the go-go '90s, Andrew Wiederhorn got into the "distressed loan" business--buying up bad debts and convincing deadbeats to pay up. Through a series of questionable deals, Wiederhorn managed to parlay this unlikely source of revenue into a $140 million fortune under the umbrella of Wilshire Financial Services Group. Then, in 1999, Wilshire collapsed.
Last week, Wiederhorn pleaded guilty in U.S. District Court to two felonies--bribing local money manager Jeff Grayson and lying to the IRS. He was sentenced to 18 months in jail and ordered to pay $2 million in restitution and a $25,000 fine.
Then the other shoe dropped. Turns out that Wiederhorn managed to engineer a deal in which his current company, Fog Cutter Capital Group, granted him a leave of absence, kept him on the company payroll at $350,000 a year--and handed him a bonus of $2 million.
In theory, the board of a publicly traded company is supposed to look after shareholders' interests. In fact, these six pinheads gave Wiederhorn a platinum parachute. It didn't hurt that one of the directors, Donald Berchtold, is Wiederhorn's father-in-law. Another, University of Southern California business school prof David Dale-Johnson, was recently given a job at Fog Cutter. A third, Ray Mathis, is an ex-FBI official and former head of the Citizens Crime Commission, a local nonprofit whose 2003 awards ceremony was underwritten by--you guessed it--Fog Cutter.
Comments (1)
Yup, that Wiederhorn is really something. This has been an ongoing local story for years. I almost went to work for Wilshire back in the day.
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