Federal prosecutors in Manhattan on Thursday released an indictment charging Patrick James, the founder of First Brands Group, and his brother Edward James with a series of alleged financial crimes that preceded the auto parts company’s collapse into bankruptcy.
The indictment lists nine criminal counts against the two brothers. The charges include operating a continuing financial crimes enterprise, bank fraud, wire fraud and a conspiracy to commit money laundering. Prosecutors say the accusations stem from a coordinated pattern of deceptive practices directed at lenders and financing partners.
According to the court filing made public in New York, the defendants are accused of carrying out multiple schemes to obtain financing for First Brands. Those schemes are said to have included inflating invoices, pledging the same collateral more than once, falsifying financial statements and hiding substantial liabilities.
Prosecutors wrote in the indictment: "These schemes yielded billions of dollars in financing to First Brands and enabled Patrick James and Edward James to reap millions of dollars in proceeds derived from their fraud." The filing frames the alleged conduct as systematic and financially consequential for the company’s creditors.
The unsealing of the indictment follows the bankruptcy of First Brands. The filing ties the alleged misconduct directly to financing relationships used by the company, and to the sums lenders provided based on representations that prosecutors say were false or misleading.
Lawyers for the defendants were not immediately available for comment, the indictment noted.
Context and consequences
The charges now facing the James brothers are criminal in nature and will proceed through the federal court process in Manhattan. The indictment does not resolve civil or bankruptcy disputes tied to the collapse of First Brands, nor does it determine recovery outcomes for creditors. The public filing details the prosecutors’ allegations but does not itself establish guilt.
What is known and what remains unclear
- The indictment publicly accuses the brothers of inflating invoices, double- and triple-pledging collateral, falsifying financial statements and concealing liabilities.
- Prosecutors state the schemes produced billions of dollars in financing for First Brands and generated millions in proceeds for the defendants.
- The eventual legal and financial outcomes from the criminal case and the company’s bankruptcy remain to be determined in court and in related proceedings.