First Brands founder Patrick James and brother charged in multibillion-dollar fraud

Manhattan federal prosecutors on Thursday charged First Brands founder Patrick James and his brother Edward James in a multibillion-dollar fraud scheme tied to the auto parts company whose bankruptcy rattled Wall Street last year. The brothers were charged with wire fraud, bank fraud, and conspiracy, including a money laundering conspiracy.

Patrick James faces an additional count alleging he ran a continuing financial crimes enterprise. A third former executive, Peter Andrew Brumbergs, has pleaded guilty in the case. Prosecutors say the men inflated invoices, repeatedly pledged the same assets as collateral for loans, and falsified corporate financial statements in schemes that yielded billions of dollars in financing.

"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," Manhattan US Attorney Jay Clayton said in a statement. A spokesperson for Patrick James denied the charges.

"He built First Brands from nothing," the spokesperson said, adding, "Mr. James looks forward to presenting his case in court." Edward James's lawyer called his arrest in Ohio "needless theater." "We look forward to appearing in New York on his behalf, and we have complete confidence in Mr.

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