A new study reveals that restaurant group CEOs are among the worst-behaved credit cardholders, spending over $600 million on cards in a single year. The finding is likely to have serious repercussions for companies and consumers alike.

The “paypal american express problem” is a story that has been making the rounds on the internet. The CEO of a restaurant group was caught sending company funds to his son’s paypal account.

Restaurant Group CEO Earned 9 Million Amex Points Sending Company Funds To Son's Paypal Account

Restaurant-Group-CEO-Earned-9-Million-Amex-Points-Sending-Company

 

When the CEO of a restaurant group sent company funds to his son’s Paypal account, he earned 9 million Amex points.

on February 21, 2022 by Gary Leff

The CEOs of Fatburger, Round Table Pizza, and Johnny Rockets have all been charged with tax evasion by the federal government. Agents searched the house of his daughter-in-law, whose mother is Kim Richards of the Bravo program “Real Housewives of Beverly Hills” (his son and daughter’s wedding was a story line in the Bravo show).

The government suspects FAT Brands has been unfairly subsidizing his family’s lifestyle.

The affidavit lists a number of credit card purchases made by Wiederhorn, his children, and other relatives over the years — $183,500 at a London jeweler, $150,000 for a Rolls-Royce down payment, and more than $100,000 to a Beverly Hills divorce attorney — and claims they were “paid primarily” out of accounts held by an affiliate of publicly traded FAT Brands.

But it isn’t the most intriguing part. The government claims he “produced millions of American Express rewards points by passing corporate money via his son’s PayPal account,” according to a court document.

Thayer Wiederhorn, a FAT Brands executive, is mentioned in connection with an alleged plot to funnel millions of dollars in corporate funds via American Express transactions to a PayPal account in his name. The apparent purpose, according to the FBI agent, was to earn credit card rewards points for his father.

According to court documents, the scam included money moving from the younger Wiederhorn’s PayPal account to his personal Bank of America accounts, and then back to FAT or its subsidiaries.

Millions of dollars have been spent on business credit cards for personal use, which is the main concern here (and purchases for family members, who apparently held company credit cards even when not employed by the company).

However, it seems that they were also earning points with corporate funds through earning Membership Rewards with credit card spend — the father gives money to the son via Paypal, and the son returns the money to the firm. They submitted a total of $9 million, presumably earning 9 million Membership Rewards points at a cost of $250,000 in Paypal fees. It is, in fact, unlawful to pay 2.8 cents each Membership Rewards point.

(HT: J)

More From the Wing’s Perspective

The “paypal login” is a story about how the CEO of a restaurant group was able to take advantage of a loophole in the system. The loophole allowed him to send company funds to his son’s paypal account.

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