Aaron Wagner, former BYU football player-turned-businessman and social media influencer, was released from jail after a three-hour detention hearing on Friday. He also pleaded not guilty to 16 counts of fraud and money laundering after a yearslong federal investigation into his business investments.
The Federal Bureau of Investigation arrested Wagner last month for one count of wire fraud, and had been held in Salt Lake County jail since Oct. 24. Wagner’s business partner, Michael Mains, was added as a defendant this week, though he will not appear in court until December. Federal prosecutors brought 15 new charges against Wagner and Mains this week.
Wagner and Mains are accused of defrauding investors out of millions of dollars over at least three years, according to court documents. Wagner’s release included more than a dozen conditions from Magistrate Judge Celia Romero.
“It’s a good result, it allows him to help us defend him,” defense attorney Nathan Crane said of the ruling for his client. “We’re in it for the long haul, but we’ll get through it.”
Prosecutors allege that Wagner and Mains, through their firm WagsCap Food, would ask for money for a restaurant or real estate project, use the money to fund a different, failing project, and then turn around and find new investors. They allegedly also used investor funds to pay for personal expenses, including mortgage payments on second homes and a private airplane.
When businesses did succeed, prosecutors say Wagner and Mains “artificially inflate[d]” business expenses and embezzled the profits. In one case, prosecutors allege they took roughly $400,000 from eight Crumbl Cookies stores between January 2021 and August 2022, and “booked these funds as ‘Shift Leads’ to make it appear they were wages paid to employees, instead of to themselves,” according to an indictment filed Wednesday.
WagsCap Food’s portfolio included restaurant chains Hello Sugar, Dirty Bird and Crumbl Cookies.
‘This is an exceptional case’
Federal prosecutors initially charged Wagner alone for defrauding investors out of roughly $2 million.
New charges filed this week against Wagner and Mains allege tens of millions of dollars in transactions were the result of fraudulent investments and claim Wagner and Mains intentionally laundered the money in order to conceal the fraud.
Online, Wagner curated a personal brand as a successful businessman, father and husband. He celebrated becoming a millionaire by 26 years old, having worked his way up from a modest Canadian upbringing. His public and professional persona, according to prosecutors, was lavish and indulgent but hard-earned — and also a fiction.
“For instance, in order to convince investors of his determination and ability to overcome hardship, he would tell a story of growing ‘From sports reject and broke college kid to playing the Rose Bowl to becoming a billion-dollar portfolio manager,’” the indictment says. “But Wagner never played in the Rose Bowl. And he never managed a billion-dollar portfolio.”
Prosecutors Friday moved to keep Wagner in jail until his trial, arguing his Canadian citizenship and wealth made him a flight risk. They also said Wagner demonstrated a habitual “disregard for the law.”
“I don’t usually move to detain [defendants] in white-collar cases,” federal prosecutor Brent Andrus said. “This is an exceptional case.”
Prosecutors alleged in their motion to detain that Wagner had intimidated witnesses by threatening them with “cease and desist” letters and, somehow, deleting social media accounts of alleged victims who spoke out against him.
Wagner and Mains both lied in court on each others’ behalf during their respective divorce proceedings, according to prosecutors, who said the men “fabricated” loans they owed to each other in order to conceal assets they might otherwise have owed their wives.
Wagner’s defense called the claims “finger-pointing without proof” and argued none of the allegations were strong enough to keep Wagner in jail.
Romero ruled that the allegations were “concerning,” but not so strong that she could not impose conditions to mitigate potential risks. Wagner will go home but remain under house arrest until Tuesday, at which point he will wear a GPS monitor to track his movements. The release conditions also prohibited Wagner from having any contact with potential victims or witnesses, opening new lines of credit and possessing firearms. His internet access will be limited and monitored, as will his finances, Romero ruled.
“These are very serious concerns,” Romero said. “I want to stress you must adhere to every single condition.”
Shannon Sollitt is a Report for America corps member covering business accountability and sustainability for The Salt Lake Tribune. Your donation to match our RFA grant helps keep her writing stories like this one; please consider making a tax-deductible gift of any amount today by clicking here.
