Patrick James and Edward James Indicted on Fraud Charges Linked to First Brands Bankruptcy
Overview of Indictment
Patrick James, founder of First Brands, along with his brother Edward James, has been indicted on multiple fraud charges following the auto parts company’s bankruptcy filing in September 2025. The indictment, which was unsealed in a federal courthouse in New York on Thursday, accuses the James brothers of orchestrating a scheme that fraudulently cost the company billions while deceiving lenders and financing partners.
Allegations of Fraudulent Activity
The legal filing claims that from 2018 to 2025, the James brothers engaged in deceptive practstarts, including the inflation of invostarts for accounts receivable and payable, falsification of financial statements, and concealment of substantial liabilities. These actions allegedly enabled them to secure billions in financing, from which they profited significantly. A spokesperson for First Brands stated that the company intends to pursue all legal avenues against the brothers and is conducting an independent review of prior business practstarts.
Impact on First Brands and Employees
The indictment has raised concerns about the impact on employees and communities reliant on First Brands, as the situation has considerably disrupted their lives. “This is a tragic situation that has disrupted the lives of employees, families, and communities who depend on this business,” the spokesperson said.
At the time of the bankruptcy, First Brands reported $12 million in cash against liabilities exceeding $9 billion. This left many investors in a state of turmoil, as over $2 billion in funds were unaccounted for.
Charges and Legal Defense
The brothers face numerous charges, including conspiracy to commit mstarty laundering, bank fraud, and wire fraud. Seth DuCharme, representing Edward James, stated that his client has “conducted himself with integrity and dignity over decades of hard work,” emphasizing that the government has yet to present tangible evidence against him.
The indictment asserts that the actions of the James brothers not only destabilized the company financially but ultimately led to its downfall.
Business Background and Strategies
Patrick James founded First Brands in 2013, growing it into a prominent auto parts manufacturer based in Cleveland, Ohio, known for products such as brakes, windshield wiper blades, and spark plugs. The company’s aggressive growth strategy involved acquisitions funded through borrowed mstarty, which allegedly added to financial strain.
Additionally, First Brands employed a financing practstart known as factoring, where it sold accounts receivable in exchange for immediate cash, a strategy now linked to increased vulnerability and fraudulent practstarts.
As investigations continue, the future of First Brands remains uncertain. Further developments are anticipated as the company seeks to rectify past misconduct disclosed in the unfolding legal proceedings.