Investors Who Bought Middle East In-N-Out Burger Franchises For $150K Say They Were Conned

LOS ANGELES (CBS/AP) -- A Southern California man is accused of conning investors out of more than $4 million as part of a scheme to sell fake In-N-Out Burger franchises in the Middle East.

Craig Stevens pleaded not guilty Monday in a Santa Ana federal court to wire fraud. He is out on $10,000 bail. A trial is scheduled for July.

Prosecutors say Stevens of Newport Beach reached out to investors by email offering In-N-Out franchises for about $150,000 per location, with an additional annual fee of $250,000 for royalties. He received about $4.27 million.

Prosecutors say in June 2014 he committed wire fraud by emailing a fake In-N-Out licensing agreement to an unidentified Lebanese investor.

The popular Bay Area hamburger spot is based in Irvine and privately owned. In-N-Out Burger Inc. does not have franchise agreements.

A hoax tricked Berkeley residents into thinking an In-N-Out Burger was opening near the UC campus. (CBS)

Last year, Berkeley residents were duped into thinking an In-N-Out was opening on Telegraph Avenue after someone hung a sign on a store front. It was a hoax, unrelated to Stevens' scam.

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