The parent company of Champion Labs in Albion is at the center of a federal fraud case after the unsealing of an indictment against former First Brands Group, LLC CEO Patrick James and his brother, former senior executive Edward James. The two are charged with conspiracy to commit wire and bank fraud, money laundering, and operating a continuing financial crimes enterprise, among other counts.
Federal prosecutors allege Patrick and Edward James orchestrated a yearslong scheme to deceive banks and lenders by using fake collateral, double- and triple-pledged assets, and falsified financial statements. These actions led to billions in losses for lenders and ultimately bankrupted First Brands—a global automotive parts company with $5 billion in annual sales—leaving only $12 million in cash and over $9 billion in liabilities when it filed for bankruptcy in September 2025.
The indictment, announced today (Friday), details how the James brothers inflated invoices, misrepresented receivables, and concealed massive debts to secure billions in financing. They allegedly used new loans to pay off old lenders and fund their own extravagant lifestyles, effectively running a “Ponzi” scheme.
Both Patrick and Edward James were arrested in Ohio and will be presented in court in the Northern District of Ohio. The case is assigned to U.S. District Judge Analisa Torres in New York.
Federal authorities also announced that Peter Andrew Brumbergs, involved in the scheme, has pleaded guilty and is cooperating with the government.
U.S. Attorney Jay Clayton condemned the brothers’ actions, stating that their fraud created an illusion of a thriving international business, while the reality was a company propped up by deception. The FBI, IRS, and Homeland Security continue to investigate, pledging to pursue justice for the victims and to protect the integrity of the nation’s financial system.
First Brands Group, the parent company of Champion Labs in Albion, has issued furlough notices to dozens of workers as the company struggles through bankruptcy. The notices, dated January 19th, state that the furlough is a temporary measure to help preserve the business, with employees expected to return February 2 unless otherwise notified.
Furloughed workers are encouraged to apply for unemployment benefits during the layoff. Albion Mayor Wes Harris reported little communication from the company about future plans for the plant.
First Brands, which filed for Chapter 11 bankruptcy in September 2025, has announced it is winding down some U.S. operations, including its brake parts division Cardone and spark plug unit Autolite, while seeking a buyer for its remaining assets. An auction to potentially sell all or parts of the company is set for February 9th.