Two Utah businessmen's ambitious restaurant expansion plans have drawn federal scrutiny as allegations of massive financial misappropriation surface.
According to ABC4, Aaron Wagner and Michael Mains face multiple federal charges for allegedly orchestrating a $40 million fraud scheme through their company Wagscap Food Services LLC, which promised investors to develop multiple restaurant chains.
The federal grand jury's indictment reveals a complex web of financial deception involving several popular restaurant brands. The defendants allegedly used their company to solicit investments to open multiple locations of establishments, including Hello Sugar, Dirty Bird, Everbowl, Crumbl Cookies, and Las Botellas.
The two men face serious legal consequences with multiple charges, including four counts of wire fraud and one count of conspiracy to commit wire fraud. Additional charges include six counts of transactional money laundering and five counts of money laundering related to concealing wire fraud proceeds.
Federal prosecutors have detailed how the scheme operated through various restaurant franchise promises. The business plan included ambitious proposals for establishing multiple locations, including 10 Dirty Bird restaurants, 10 Kokonut Island Grill restaurants, and 10 Hello Sugar establishments.
According to court documents, Wagner's representations to investors revealed significant discrepancies between stated intentions and actual fund usage. The federal indictment outlines how Wagner made specific claims about fund allocation that proved false.
Court documents reveal the extent of the alleged misappropriation. The defendants reportedly diverted $9 million of investor funds toward personal purchases and investments.
As stated in the federal indictment:
Wagner represented to lenders or investors that the funds would be used for developing certain restaurants, but in fact intended to use the funds for personal expenses or investments, or to prop up projects for other investor groups (which also included himself as an investor). In all, he brought in more than $40 million from investors.
The defendants' spending included several high-value purchases, such as a $4 million second home in Scottsdale, Arizona, and an $8 million personal aircraft. Additional purchases included a $4.5 million commercial property intended for a nightclub called 'SWAGS' and an $8 million real estate property in Missoula, Montana.
The federal prosecution has outlined specific assets subject to forfeiture if the defendants are convicted. These assets include their SR22 aircraft and multiple properties across different states.
The case's resolution remains pending, with a jury trial scheduled for February 2025. The prosecution's focus includes recovering assets acquired through the alleged fraudulent scheme. The legal proceedings will determine not only the defendants' fate but also the disposition of numerous properties and assets acquired during the scheme's operation.
Aaron Wagner and Michael Mains face federal prosecution for allegedly orchestrating a $40 million fraud scheme through their company Wagscap Food Services LLC. The Utah-based businessmen allegedly misled investors with promises of developing multiple restaurant franchises across several popular brands.
The case will proceed to trial in February 2025, where prosecutors will present evidence of how the defendants allegedly diverted $9 million of investor funds for personal purchases, including luxury properties and an aircraft. If convicted, they face substantial asset forfeiture, including properties in Arizona, Montana, and Utah, along with their private aircraft.
