Executives of Tricolor Holdings Charged in $900 Million Auto Loan Fraud Scheme
On December 17, 2025, executives of Tricolor Holdings were charged in Manhattan federal court with a years-long fraud scheme. Daniel Chu, the founder and former CEO, allegedly directed multiple executives since 2018 to defraud investors and lending institutions.
Tricolor Holdings filed for Chapter 7 bankruptcy in September 2025. At the time of the filing, the company owed more than $900 million to its largest lenders, contributing to a collapse that harmed banks, investors, employees, and customers.
The indictment alleges that Chu led a scheme to defraud creditors by falsifying auto-loan data and double-pledging collateral. He also sought to conceal the fraud in secretly recorded phone calls.
US attorney Jay Clayton described the fraud as an integral component of Tricolor’s business strategy, with the scope becoming apparent as lenders questioned the collateral during the summer of 2025.
Chu extracted over $6 million from the company, including two payments totaling $6.25 million, some of which was used to purchase a multimillion-dollar property in Beverly Hills.
