Estimated read time: 2-3 minutes
- Two Utah men, Aaron Wagner and Michael Mains, face federal charges accusing them of fraud.
- Prosecutors say the duo misused over $40 million from investors for personal expenses and luxury items.
- Prosecutors are seeking forfeiture of properties and assets acquired through the alleged scheme.
SALT LAKE CITY — Two Utah men have been indicted by a federal grand jury and accused of collecting tens of millions of dollars from investors to be used for developing restaurants and instead using it to finance their lavish lifestyles.
Aaron Wagner and Michael Mains were charged last week in federal court with four counts of wire fraud, conspiracy to commit wire fraud, six counts of money laundering and five counts of concealing money laundering. A federal complaint was filed against Wagner in October.
"Aaron is looking forward to defending himself against the allegations raised in the indictment," Wagner's attorney, Nathan Crane, said in a statement to KSL.com.
From about 2021 until two months ago, in September, "Wagner represented to lenders or investors that the funds would be used for developing certain restaurants, but (he) in fact intended to use the funds for personal expenses or investments, or to prop up projects for other investor groups," according to charging documents. "In all, he brought in more than $40 million from investors."
Part of the scheme included using investor funds "to engage in conspicuous, lavish personal spending to project to potential investors a false illusion of a successful business record," the charges state. "He would post pictures of his conspicuous spending on his marketing channels, all without disclosing that his exotic cars, personal jets, multimillion-dollar homes and extravagant lifestyle were actually funded by theft."
The duo allegedly promised investors that proceeds from the restaurants would be used to acquire, build and operate different stores.
"Instead, from more than $11 million investors provided to fund 10 Dirty Bird restaurants, 10 Kokonut Island Grill restaurants and 10 Hello Sugar restaurants, Wagner and Mains diverted approximately $9 million to their own purposes.
"For instance, they used that money instead to fund down payments to purchase a $4-million second home for Wagner in Scottsdale, Arizona; an $8-million personal airplane for Wagner and Mains; a $4.5-million commercial property to be developed into a nightclub called 'SWAGS;' and, an $8-million real estate property in Missoula, Montana," according to charging documents.
When projects were successful, Wagner and Mains "would siphon money to themselves before calculating the division of profits. For example, they took approximately $400,000 out of eight Crumbl stores between January 2021 and August 2022," the charges state.
Prosecutors say the men formed Wagscap Food Services, LLC, in Lehi, which was "critical to concealing their scheme."
Court documents also note that Wagner's false representations extended to his personal life, where he would tell potential investors about playing in the Rose Bowl and going from being broke "to becoming a billion-dollar portfolio manager."
"But Wagner never played in the Rose Bowl. And he never managed a billion-dollar portfolio," charging documents state.
Prosecutors state in the charges that they are seeking forfeiture of properties in Montana, Arizona and Alpine, as well as Wager and Mains' private plane.
Contributing: Tim Vandenack
