A former CEO pled not guilty to charges concerning an alleged $800 million plot that reportedly provided subprime loans to illegal aliens.
Former Tricolor Holdings CEO Daniel Chu pled not guilty to fraud and conspiracy charges Tuesday, court records show. Over 75% of the company’s customers were reportedly Hispanic illegal aliens as of December 2022.
Tricolor was founded in 2007, emerging as one of the largest auto loan lenders and used-car retailers in the southwestern United States, Reuters reported June 24. It liquidated in September 2025 after allegedly leading three of its lenders to take on nine-figure losses.
The now-bankrupt lender disclosed in a bond deal that 68% of its borrowers didn’t have a credit score, and over 50% of them didn’t have a drivers license, Financial Times reported September 2025.
Regional lender Fifth Third Bank didn’t respond to the Daily Caller News Foundation’s request for comment. JPMorganChase, Barclays, and the U.S. Department of Justice (DOJ) declined to comment.
Chu, ex-COO David Goodgame, ex-CFO Jerome Kollar, and ex-finance executive Ameryn Seibold at Tricolor allegedly conspired to have the company pledge around $2.2 billion in collateral to meet lender requirements when it only had around $1.4 billion, the DOJ stated in a press release December 2025. Kollar and Seibold pled guilty.
Goodgame pled guilty to the charges on June 24 and will likely cooperate with prosecutors against his former boss, according to Reuters.
The former chief operating officer at Tricolor Holdings pleaded guilty on Wednesday to fraud and conspiracy charges in connection with the now-bankrupt subprime auto lender’s collapse. https://t.co/0j0N1h8exf
— Reuters Legal (@ReutersLegal) June 24, 2026
“[W]here we would have an issue is … if they sent an auditor and they said, pull this up on your screen, right, that would be a problem,” Chu said in a secretly recorded August 2025 call, the DOJ alleged. “Yes. That would be bad,” Kollar allegedly agreed.
Chu also allegedly explored trying to blame Tricolor’s lenders for “ignoring red flags,” according to the DOJ.
U.S. District Judge District Jed Rakoff dismissed a lawsuit from investors against JPMorganChase, Barclays, and Fifth Third Bank which alleged that the banks ignored “red flags” when financing Tricolor, Reuters reported June 10.
“As alleged in the indictment, CEO Daniel Chu was the leader of an elaborate scheme to defraud creditors of Tricolor,” U.S. Attorney Jay Clayton stated in the December 2025 press release. “At his direction, Tricolor repeatedly lied to banks and other credit providers, including by falsifying auto-loan data and ‘double pledging’ collateral … New Yorkers and all Americans want continuing criminal enterprises shut down and their leaders brought to justice whether they are on our streets or in our markets.”
Among the charges against Chu is “Continuing Financial Crimes Enterprise” (CFCE), which carries a minimum mandatory sentence of 10 years, but can also lead to life in prison. Also known as the “Financial Kingpin” statute, it can be invoked when the government suspects at least four people of working together to commit financial crimes receiving at least $5 million in receipts within a 24-month period, according to Barnes & Thornburg. This is the first time in a decade the statute was invoked.
Prosecutors said during the Tuesday hearing that they were able to access 10 out of the 21 devices they seized. Chu’s defense attorney, Matthew Schwartz, requested during the hearing that the court delay the trial to account for the DOJ’s expansive discovery process.
“Mr. Chu wants to go to trial, and he wants to go to trial as soon as fairly possible to clear his name,” Schwartz said. “He’s an innocent man. But he has to be ready and he has to be afforded reasonable time to review the government’s evidence, to prepare his defense, to litigate all of these motions, to pursue third party discovery, to do his own investigation, to prepare for substantial cross-examinations.”
U.S. District Judge Kevin Castel upheld the trial’s October 2026 start date during the Tuesday hearing. He plans to hold another hearing on July 29 to determine if the start date needs to be delayed to February 2027.
(DCNF)