New testimony in the First Brands Group bankruptcy case has shed additional light on the alleged financial fraud that preceded the company’s collapse.
During a hearing in U.S. Bankruptcy Court last week, First Brands Chief Executive Officer Charles Moore testified that former CEO Patrick James directed finance employees to transfer hundreds of millions of dollars in corporate funds into bank accounts under his personal control. The hearing focused on whether James’ personal assets and bank accounts should remain frozen while litigation continues.
First Brands, the former owner of Champion Laboratories in Albion, filed for bankruptcy after investigators uncovered what has been described as a multibillion-dollar fraud scheme.
Moore testified that shortly after taking over the company, he discovered evidence of widespread financial misconduct, including falsified invoices and the repeated use of the same company assets to secure loans from multiple lenders.
According to Moore, several former finance employees acknowledged that invoices had been altered to obtain financing. He also referenced internal company messages from 2022 in which employees discussed creating “dummy invoices” to secure additional funding, with another employee reportedly expressing no concern about falsifying financial records.
Federal prosecutors allege James orchestrated a scheme that diverted billions of dollars from First Brands to finance an extravagant personal lifestyle. He is awaiting trial on federal fraud and conspiracy charges.
The bankruptcy of First Brands led to the closure of dozens of manufacturing facilities and the loss of more than 4,000 jobs, including the shutdown of Champion Laboratories in Albion earlier this year.
Champion Laboratories has since resumed operations under new ownership after Premium Guard Inc. (PGI) of Memphis, Tennessee, purchased the company’s assets and intellectual property. PGI has begun rehiring workers as automotive filter production ramps back up at the Albion facility.