First Brands Founder Charged With Fraud That Wiped Out 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.

Patrick, 61, and Edward, 60, were arrested in Ohio this morning and are expected to appear in federal court later on Thursday, authorities ...