Patrick James, founder of auto‑parts supplier First Brands, pleaded not guilty to a nine‑count indictment charging an eight‑year scheme to defraud lenders by double‑ and triple‑pledging collateral, fabricating invoices and concealing debt. Prosecutors in Manhattan described bank fraud, wire fraud and money‑laundering counts tied to the company’s collapse.

In a Manhattan federal indictment filed Feb. 4, prosecutors allege that Patrick James engaged in an eight‑year scheme to defraud lenders and conceal the true financial condition of First Brands, a supplier in the auto‑parts sector. The complaint accuses James of double‑ and triple‑pledging the same collateral to multiple banks, fabricating or inflating invoices to create the appearance of receivables, and hiding outstanding debt through sham transactions and off‑book arrangements. Charges include bank fraud, wire fraud, and money‑laundering counts that, according to prosecutors, explain how lending institutions were induced to provide financing based on materially false representations. The alleged misconduct is said to have preceded the company’s collapse, leaving significant creditor exposure and prompting potential civil recovery actions alongside the criminal case. James pleaded not guilty and is expected to contest the prosecution’s evidence, which prosecutors signaled will include financial records, loan documents, and communications with lenders. The case underscores heightened enforcement focus on sophisticated corporate finance frauds that can cause widespread creditor losses and complex forensic accounting investigations.