First Brands Group is closing its distribution facility in Patterson, California, resulting in 98 layoffs, with the majority occurring on April 4, 2026, and the remainder on April 30, 2026. This closure follows the company's September 2025 Chapter 11 bankruptcy filing and federal fraud indictments against executives, contributing to over 2,500 nationwide layoffs. Read the full story at KCRA: https://www.kcra.com/article/stanislaus-county-layoff-first-brands-group-closes-facility-patterson/70563533
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The First Brands Group, an automotive aftermarket parts supplier, is closing its western distribution center in Patterson, resulting in 98 workers in Stanislaus County losing their jobs. The closure follows allegations of fraud against the company’s founder.
The company filed for Chapter 11 bankruptcy protection in September and has been carrying out layoffs nationwide. Former CEO Patrick James and his brother, Edward James, are accused of orchestrating a multi-billion dollar fraud scheme that led to the company’s collapse. Federal prosecutors allege the two operated a Ponzi scheme, using new loans to repay older lenders while pursuing aggressive growth through acquisitions. Patrick James is also accused of personally pocketing millions from the scheme.
https://www.youtube.com/watch?v=xH2veRE841Y
Core Fraud Allegations
Federal prosecutors and company court filings allege that founder and former CEO Patrick James, along with his brother Edward James, orchestrated a "years-long fraud" to mislead lenders. The scheme involved:
Invoice Manipulation: Generating fake or inflated invoices for sales that never occurred or were worth far less than reported.
Double and Triple-Pledging: Secretly using the same assets—such as inventory and accounts receivable—as collateral for multiple different loans.
Falsified Financials: Misrepresenting the company's financial health to secure billions in financing to fuel an aggressive growth-through-acquisition strategy.
Personal Enrichment: Allegations that Patrick James diverted hundreds of millions of dollars to himself to fund a lavish lifestyle, including private chefs and luxury properties.