Estimated read time: 4-5 minutes
- Aaron Wagner, an investor in various Utah food ventures, has been jailed on a federal wire fraud charge.
- He is accused of using $2 million from an investor intended for a restaurant venture to help purchase an $8.3 million airplane.
- WagsCap Food and Wagner, a former BYU football player, are also sued by investors for breach of contract in a separate matter.
SALT LAKE CITY — Back in 2021, Aaron Wagner of Lehi-based Wags Capital sounded a confident message in announcing plans to invest $20 million to open Dirty Bird Chxx chains across Utah and the country.
"Dirty Bird Fried Chxx is a hot brand with the best 'hot chxx' in the country. ... This is a stand-out brand and we believe the potential is immense," he said back in September 2021, when Wags Capital's plans received a brief flurry of media attention. The opening of a Dirty Bird location in Ogden soon followed with plans for up to 30 more locations in the subsequent year to 14 months, according to a Sept. 8, 2021, press release.
Along the way, restaurant industry publications like Nation's Restaurant News and Foodservice Equipment Reports touted what they said were Wags Capital's investment in other food and beverage brands, including Village Baker, Crumbl Cookies, Kokonut Island Grill, Everbowl and Mas Por Favor. The Wags Capital website is no longer active, but the WagsCap Food Services Instagram page still touts its connections to Dirty Bird, Kokonut Island Grill, Hello Sugar and Everbowl.
Fast-forward three years and a lot has changed.
The handful of Dirty Bird outlets that opened, including the original Provo site and the Ogden location, are closed and Wagner now faces a felony count of wire fraud, filed last week in U.S. District Court, accusing him of misusing $2 million. The businessman, booked into the Salt Lake County jail Thursday, had crafted a scheme, according to the complaint, "to defraud private investors and lenders in restaurant businesses managed" by WagsCap Food, the investment firm he helped manage.
More specifically, $2 million, the complaint says, was not used to build Hello Sugar restaurants as intended, but to help cover the cost of an $8.39 million airplane.
At the same time, Axia Partners issued a statement Friday announcing that Wagner's role as partner with the real estate investment firm had been "terminated" earlier in the year. "In light of recent external developments related to Mr. Wagner's other business ventures, Axia Partners has taken steps to clarify that it has always operated entirely independently from any of Mr. Wagner's other ventures," reads the statement.
Moreover, Wagner, WagsCap Food and Dynamic Capital, managed by Wagner, is being sued in 4th District Court in Provo for breach of contract by three Florida investors. They say they provided $750,000 to WagsCap Food in 2022 to build four Dirty Bird locations in Utah but never got the $2.25 million they were promised in return.
The lawyer representing Wagner in the 4th District Court case didn't immediately respond to a query seeking comment, though Wagner denied any wrongdoing in his court response in that matter in August. Wagner, who played college football at Washington State University and Brigham Young University in the 2000s, has no attorney listed in the criminal case.
'Returns beyond riches'
Wags Capital's acquisition of a controlling stake in Dirty Bird in 2021 and the firm's plans to invest $20 million in expanding the locale prompted an enthusiastic response at the time from Salt Lake City-based restaurateur Michael McHenry. He developed the concept and opened the first locale featuring "Nashville-inspired" fried chicken sandwiches in Provo.
The new owners, McHenry told the Standard-Examiner in Ogden at the time, "plan to take Dirty Bird to the moon." The plans, though, never materialized as envisioned.
The federal complaint, filed last Wednesday but only unsealed to the public on Friday, said Wagner and those working with him "would show off" Wagner's "lavish lifestyle (including personal jets, exotic vehicles, luxury vacations, etc.) to induce investors to believe that he was a successful businessman." However, it goes on, Wagner and his associates would not disclose "that many of these indicators of success were in fact financed by investor funds he had stolen from the very businesses they were meant to support."
In fact, the complaint alleges a Ponzi-like operation. Wagner and his associates, it charges, would use funds from more recent investors "to fund a separate, failing project for an earlier group of investors that included himself or his own entities in order to conceal the fact that he had already squandered or diverted the investors' money."
In their lawsuit, the Florida investors said the Wags Capital website had promised "returns beyond riches."
Among other activities, Wagner also spoke in late 2022 at Alpha Con, a gathering of apparent "alpha" males, where he spoke of his pursuit of the American Dream, according to the Deseret News. "You can have anything you want," Wagner told the crowd, though the report said he didn't offer further explanation.
