Tricolor execs charged with ‘systematic fraud’ after subprime auto lender roiled banking sector

U.S. prosecutors have charged top executives at bankrupt subprime auto lender Tricolor Holdings with what they call a years-long “systematic fraud” scheme that sent shockwaves through the banking industry earlier this year.

In an indictment unsealed in Manhattan, prosecutors allege that Daniel Chu and David Goodgame orchestrated a series of fraud schemes from at least 2018 through September 2025 that allowed Tricolor to obtain billions of dollars from lenders and investors by misrepresenting the nature and value of loan collateral.

Tricolor sold used cars to customers with limited or poor credit in the southern and southwestern U.S. and told the court it had assets of more than $1 billion at the time of bankruptcy.

The indictment said Tricolor executives pledged the same auto loans to multiple lenders at the same time or “double-pledged” assets to banks and manipulated credit data to make past-due or written-off loans appear eligible for financing.

This is breaking news. Please refresh for updates.