OHIO / NEW YORK — Patrick James, former CEO of bankrupt auto parts supplier First Brands Group, was indicted on federal fraud charges and arrested Thursday alongside his brother Edward James, a former senior executive with the company, authorities said.
The indictment from the U.S. Attorney’s Office in the Southern District of New York alleges the James brothers orchestrated a yearslong fraud, deceiving investors and banks to obtain billions for First Brands — and millions for themselves — through fake documents and false financial reports.
First Brands, previously known as Crowne Group, filed for bankruptcy in September with over $9 billion in debt and only $12 million in cash, according to federal charging documents. The Cleveland-based company acquired aftermarket auto parts brands, including Fram filters, Autolite sparkplugs, and Anco windshield wiper blades, using debt-financed deals.
Investigators allege the James brothers inflated accounts receivable invoices and repeatedly borrowed against them without lender or investor knowledge, using new loan proceeds to pay old lenders in a scheme the IRS called “Ponzi-style.” The funds also financed a lavish lifestyle, including seven homes and 17 vehicles.
A separate lawsuit claims Patrick James transferred millions to personal and family-related accounts, including $8 million to his son-in-law’s wellness company, $2 million to his family office, at least $3 million for NYC townhouse rent, $500,000 to a personal chef, and $150,000 for a celebrity trainer. Most transfers occurred between 2023 and 2025.
The indictment also revealed that former First Brands executive Andy Brumbergs has pleaded guilty and is cooperating with authorities.
Patrick, 61, and Edward, 60, each face nine counts, including wire fraud, bank fraud, and conspiracy to commit money laundering. Most charges carry up to 30 years in prison, while Patrick could face a life sentence if convicted. They are scheduled to appear in an Ohio federal court later Thursday.
An attorney for the James brothers did not immediately respond to requests for comment.
