Daniel Chu, the founder of the bankrupt subprime auto lender Tricolor Holdings, and David Goodgame, its former Chief Operating Officer, have entered pleas of not guilty to charges of conspiring to defraud lenders and investors. This announcement came during their appearance before US District Judge Kevin Castel in Manhattan. Prosecutors indicted the two last month, alleging that Chu orchestrated a scheme involving the "double-pledging" of auto loan collateral, manipulation of loan descriptions, and classifying "near-worthless" assets as meeting lender collateral requirements.
Tricolor filed for Chapter 7 bankruptcy in September 2025, after closing over 60 locations across Texas and the US Southwest. The indictment alleges that Chu directed a years-long financial crimes enterprise that defrauded multiple banks and private credit providers of more than $900 million. Goodgame is accused of knowingly participating in these schemes. The fraud reportedly involved pledging the same collateral to multiple lenders and manipulating loan data to make ineligible or delinquent auto loans appear current. The company also allegedly fabricated backup records, such as fake customer payments. The alleged fraud began as early as 2018 and expanded significantly by 2021.
Adding to the complexities, Jerome Kollar, Tricolor’s former CFO, and Ameryn Seibold, a former finance executive at the company, pleaded guilty to fraud charges on December 16, 2025, and are cooperating with federal authorities. As the company approached insolvency, Chu reportedly directed Kollar to pay him the final installments of a $15 million bonus, receiving $6.25 million in August 2025, some of which he used to purchase a multimillion-dollar property in Beverly Hills, California. Bondholders have also sued Wilmington Trust NA, the trustee for Tricolor's securities, for allegedly failing in its bond supervision duties.
