Two former First Brands executives were indicted and a third plead guilty in a fraud case spanning years, federal authorities say.
Patrick James, former CEO of First Brands, and his brother, Edward James, a former senior executive, were indicted on charges of conspiracy to commit wire fraud and bank fraud, conspiracy to commit money laundering and multiple counts of wire fraud and bank fraud.
"As alleged in the indictment, Patrick James, together with his brother, Edward James, perpetrated a staggering fraud at First Brands Group," says U.S. Attorney Jay Clayton. "The James brothers obtained billions for First Brands — and millions for themselves — by presenting their lenders with the impression of a successful, growing international business. The indictment and the guilty plea unsealed today describe a very different reality: A business run through fraud, fake documents and false financials."
Patrick James was also charged with managing a continuing financial crimes enterprise. Peter Andrew Brumbergs plead guilty in the scheme and is cooperating with prosecutors.
Investigators allege that from 2018-2025, the James brothers built and then bankrupted the aftermarket parts supplier by creating fake and falsely inflated invoices, double- and triple-pledging loan collateral, falsifying corporate financial statements and concealing liabilities from lenders. First Brands raked in billions in financing, U.S. attorneys say, and the brothers got millions in proceeds.
"Individuals who lie about the financial health of their company for purposes of greed create shockwaves across the business sector that endanger the economic wellbeing of others," says U.S. Attorney David M. Toepfer. "The fallout from selfish and deceptive actions — such as those alleged in this case — can cascade down to honest and hardworking company employees based right here in Ohio. Their jobs and livelihoods are at stake due to the corrupt actions of a few individuals. Together with our federal partners, we will seek justice on behalf of all victims affected by this travesty."
First Brands released a statement on the indictments and plea, saying the criminal charges relate to alleged actions by former executives who are no longer involved with the company.
"This is a tragic situation that has disrupted the lives of employees, families and communities who depend on the business," the statement says. "We recognize the very real human toll of these events and the uncertainty many are facing."
First Brands says a special committee of the board of managers will conduct an independent review of business practices and the company will pursue all available claims and causes of action against the Jameses and others.
"First Brands Group is fully cooperating with law enforcement and remains focused on advancing its ongoing sale process at this time," the statement says.
