Orange County Man Accused of Bilking Investors Out of More than $4 Million in In-N-Out Burger Franchise Scheme

On Monday, May 11, 55-year-old Craig Stevens of Newport Beach pleaded not guilty in a scheme allegedly designed to bilk investors out of more than $4 million by selling ‘bogus’ In-N-Out Burger franchises in the Middle East, according to an LA Times article.

Stevens, who was in federal court in Santa Ana, pleaded not guilty to wire fraud. Prosecutors allege that in January of 2014, Stevens contacted potential investors via email, peddling the franchises for approximately $150,000 per location. Royalties would cost an added $250,000 annually, according to the article.

Charge documents filed by the U.S. attorney’s office claim that through his email scheme, Stevens solicited about $4.27 million. Court documents also allege that in June of last year, Stevens passed off a fake licensing agreement for an In-N-Out franchise via email to a Lebanese investor, who was not identified.

While Stevens made claims to investors of partnerships and franchise agreements, In-N-Out Burger Inc., based in Irvine, has been in business since 1948 and is privately owned. The company says it has no such agreements with third parties. Stevens is scheduled to go on trial on the wire fraud charge in July.

As seasoned Los Angeles business attorneys, it is sometimes difficult to believe how gullible some individuals are, particularly when it comes to email or other schemes on the Internet – but it happens every day.

Before you invest in any franchise, it is vital to have a skilled attorney review all agreements, restrictions, rights, purchase or sales agreements, and other relevant documentation regarding the purchase of a franchise. Franchise law is complex, particularly given the fact that so many businesses are crossing into countries outside of the U.S. today.   Franchises are also subject to numerous regulations, so it is essential to have every detail analyzed with a fine-tooth comb.

If you’re considering investing in a franchise opportunity, speak with the professionals at Spotora & Associates first.

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This entry was posted on Monday, May 25th, 2015 at 10:32 am and is filed under Business & Corporate Law, Contract Law, Litigation. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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