Stephen Graham, the former finance chief of bankrupt auto parts supplier First Brands Group, has entered a guilty plea for his role in an alleged fraud plot at the company.
According to court records, Graham pleaded guilty on March 2 to two counts of wire fraud affecting a financial institution, along with one count each of bank fraud and conspiracy to commit wire fraud. Prosecutors alleged such crimes occurred from around 2018 through 2025, according to documents filed in the U.S. District Court for the Southern District of New York.
Graham is now set to testify against First Brands founder Patrick James and his brother Edward at their upcoming criminal trial, Bloomberg reported late last week. Graham’s testimony “could give jurors a roadmap into a fraud that caused billions of dollars in losses,” the news outlet reported.
In charging the James brothers in late January, U.S. Attorney Jay Clayton said that the two had “perpetrated a staggering fraud at First Brands Group.” The brothers face charges of conspiracy to commit wire fraud and bank fraud, conspiracy to commit money laundering and several counts of wire fraud and bank fraud. First Brands filed for bankruptcy in September 2025.
“At the time of its bankruptcy, First Brands — a company that reported approximately $5 billion in net annual sales worldwide — declared just $12 million in cash in its corporate bank accounts and over $9 billion in liabilities,” according to a Jan. 29 news release issued by the U.S. Attorney’s office for the Southern District of New York. “As a consequence of the defendants’ fraudulent schemes, First Brands’ lenders and creditors now face billions in losses.”
Graham’s plea comes after First Brands’ former senior VP of finance, Andrew Brumbergs, pleaded guilty to eight counts of similar charges.
In charging documents, prosecutors said that Graham had “knowingly executed, and attempted to execute, a scheme and artifice to defraud a financial institution.” They went on to say that Graham and others “agreed to make and cause to be made a series of false statements to financial institutions regarding First Brands’ financial condition to fraudulently obtain asset-backed financing for First Brands from those financial institutions.”
In court, Graham acknowledged that First Brands issued financial statements to banks that contained “false and misleading information,” Bloomberg reported.
“I also participated in lender presentations where I presented the false and inflated financial statements to First Brands’ lenders to obtain financing for First Brands on better terms than the banks would otherwise offer,” Graham said, according to Bloomberg. “I knew this was wrong.”
First Brands’ collapse has indeed spilled over into the financial fate of banks that took stakes in the company. Investment bank Jeffries, for instance, earlier this year said it took a $30 million pretax loss as a result of First Brands’ unraveling. And within the company itself, First Brands’ subsequent restructuring plans may lead to as many as 2,000 job cuts.
