The founder of Tricolor Holdings and other company executives have been charged with what federal authorities say was a massive fraud that led to the subprime auto lender’s bankruptcy
ByThe Associated Press
December 17, 2025, 8:32 AM
NEW YORK — The founder of Tricolor Holdings and other executives of the subprime auto lender were charged Wednesday with what federal authorities say was a massive fraud that led the company into bankruptcy.
Daniel Chu, the company’s founder and chief executive, was charged in an indictment unsealed in Manhattan federal court with directing multiple executives since 2018 to defraud investors and lending institutions through multiple fraudulent schemes.
A defense lawyer did not immediately return a message seeking comment.
According to the indictment, the scope of the fraud was revealed in late August when lenders confronted Chu and other executives about Tricolor’s collateral.
Chu and others accused of carrying out the fraud initially tried to conceal it, saying the collateral issues were due to an administrative error, the indictment said.
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After those efforts failed, Chu extracted over $6 million from the company, the indictment said.
On Sept. 10, Tricolor filed for Chapter 7 bankruptcy because it owed over $900 million to the company’s largest lenders, the indictment said.
More information was expected to be released at a morning news conference.