A global supplier of automotive parts closed a plant in Illinois and laid off hundreds of workers here, just days after former executives were arrested on multiple charges.
Patrick James, founder of First Brands and former CEO, was arrested Jan. 29. His brother Edward James, a former senior executive with the company, was also arrested.
The brothers face charges of conspiracy to commit wire fraud and bank fraud, conspiracy to commit money laundering, and multiple counts of wire fraud and bank fraud. The charges are in connection with various schemes to defraud lenders regarding the liabilities and financial condition of First Brands, according to the U.S Attorney for the Southern District of New York.
The arrests occurred after former First Brands senior executive Peter Andrew Brumbergs pleaded guilty to his role in the scheme before U.S. District Judge Analisa Torres Jan. 26.
“The James brothers obtained billions for First Brands—and millions for themselves—by presenting their lenders with the impression of a successful, growing international business,” Clayton said. “The indictment and the guilty plea unsealed today describe a very different reality: a business run through fraud, fake documents, and false financials.”
On Feb. 3, First Brands reported the McHenry plant closure to the state that it was closing its plant in McHenry, Illinois. The layoffs of 389 workers started the same day.
The class action law firm Strauss Borrelli PLLC announced Feb. 6 that it had launched an investigation of First Brands for a possible violation of the WARN Act. The statute requires employers with 100 or more employees to provide a 60-day notice of significant layoffs or plant closings.
Telephone and email inquiries to First Brands and the Brake Parts Inc. plant in McHenry did not generate a response.
This article originally appeared on Journal Star: Major company shutters Illinois plant and lays off hundreds of workers
Reporting by Mike Kramer, Peoria Journal Star / Journal Star
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