Here’s what you need to know:
- Stephen Graham is the former CFO of beleaguered First Brands Group. He is the fourth executive indicted and the second to plead guilty and cooperate with prosecutors.
- Two other executives, brothers Patrick and Edward James, have plead not guilty to charges of bank and wire fraud.
- First Brands filed for bankruptcy in September. Since then, deals to sell off its brands have fallen through and layoffs have started around the globe.
Stephen Graham, the former CFO of First Brands Group, plead guilty Monday to four counts relating to the alleged bank fraud that brought the company to bankruptcy. He is cooperating with prosecutors.
First Brands, which owns more than 20 brands in the automotive and heavy-duty aftermarket, filed for bankruptcy in September. Since then, two former executives — brothers Patrick and Edward James — were indicted in alleged bank fraud involving $2 billion unaccounted for on the company's books. Another former executive, Peter Andrew Brumbergs, has also plead guilty and is cooperating with prosecutors.
The company is laying off thousands of workers as its plants shut down due to lack of funding or buyers.
[RELATED: Mexican plants may be a thorn in any First Brands deal]
Graham plead guilty before Judge Analisa Torres in the southern district of New York to four counts: conspiracy to commit wire fraud affecting a financial institution and to commit bank fraud, wire fraud affecting a financial institution, bank fraud, and wire fraud affecting a financial institution.
The charges allege Graham and others agreed to make false statements to FIrst Brands' lenders and financiers regarding its financial condition and the existence and value of collateral the company pledged or sold to those lenders and financiers. He and others, prosecutors say, perpetrated a scheme to defraud a financial institution to obtain money.
Graham's sentencing is set for Aug. 3. He was released on his own signature and must forfeit any property he has that were purchased using money gleaned from the alleged scheme.
Brumbergs plead guilty to eight counts related to bank fraud and wire fraud on Jan. 29. Sentencing is his case is set for June 22 in Torres' court.
Patrick James was released Feb. 4 on a $50 million personal recognizance bond with travel restrictions and home detention in his Long Island home. Edward James is free on a $25 million bond, also with certain travel restrictions and home detention. Both brothers surrendered their passports to the court.
