First Brands Founder Charged With Fraud That Erased Billions

First Brands Group founder Patrick James and his brother Edward, a former executive at the company, were indicted in New York following the collapse of the bankrupt auto-parts maker last year.

The duo engaged in a series of schemes to defraud the company’s lenders and financing partners, according to the federal indictment. The brothers faked and inflated invoices for accounts receivable, double- and triple-pledged loan collateral, falsified financial statements and hid liabilities from lenders, the US alleged. As a result of the fraud, “hundreds of millions of dollars” flowed into the personal accounts of Patrick James, prosecutors said.