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A New In-N-Out Lawsuit Alleges Fraud, Embezzlement by a Company Executive

January 12, 2006|Roger Vincent | Times Staff Writer

In-N-Out Burgers' in-house power struggle took another turn this week when the popular fast-food restaurant operator accused a top executive of fraud and embezzlement.

Richard Boyd, who was in charge of building In-N-Out restaurants and is still on the payroll, diverted construction materials and crews to his own property and charged the work to the company, according to a lawsuit filed Tuesday in Los Angeles County Superior Court.

The Irvine-based restaurant chain also said that Boyd, who is a company director and one of two trustees in charge of the founding Snyder family's trusts, gave business to a favored contractor without competitive bidding and overpaid for construction services. Boyd ordered the destruction of documents to conceal his fraudulent activity, the lawsuit alleges.

Boyd's attorney, Philip Heller, called the allegations "totally baseless and demonstrably untrue."

He said Boyd "at all times acted in the best interests of the company and the family trust. This is just an effort by In-N-Out to fabricate a story in a feeble attempt to discredit Mr. Boyd."

Boyd filed a lawsuit last week contending that heir Lynsi Martinez and allied executives had attempted to force out 86-year-old Esther L. Snyder, the family matriarch, company president and a board member. Martinez, 23, is the only grandchild of Snyder, who opened the first drive-through In-N-Out stand in 1948 with husband Harry Snyder.

Boyd alleged that he was the lone impediment to Martinez's efforts to engineer a coup and install new managers who would expand the chain too quickly. Boyd also accused Martinez, Vice President Mark Taylor and others of attempting to wrongly fire Boyd from his company and trustee positions.

Martinez said in a statement that Boyd's lawsuit "contains outright lies and awful inaccuracies to try to cover his own errors. By far, the most upsetting is his fabrication about the relationship between me and my gramma." Her grandmother, Martinez said, should "continue to serve as president as long as she desires."

In-N-Out's corporate counsel also denied Boyd's claim that an attempted coup was in motion. "There is no tension between family members," Arnold Wensinger said.

Also named as a defendant in the company's lawsuit was Bloomington, Calif.-based Michael Anthony Cos., the allegedly Boyd-favored contractor that built more than half of the company's 202 restaurants.

Anthony President Michael Madrid said Wednesday that he built a wall worth less than $5,000 for a home Boyd owns in Bullhead City, Ariz. Boyd expected to pay for the wall, Madrid said, but the contractor didn't bill him as a courtesy.

"There was never a mention of 'do this as a favor,' " Madrid said.

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