Founder of bankrupt subprime auto lender Tricolor Holdings is charged with fraud
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Article contentNEW YORK (AP) — The founder of Tricolor Holdings led other top executives of the subprime auto lender on a seven-year campaign to defraud its largest lenders out of nearly a billion dollars, authorities said Wednesday, as they announced two arrests and guilty pleas by two former executives.Sign In or Create an AccountEmail AddressContinueor View more offersArticle contentDaniel 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. The fraudulent schemes included fabricating data and making false statements, according to the indictment.Article contentWe apologize, but this video has failed to load.Try refreshing your browser, ortap here to see other videos from our team.Article contentArticle contentA defense lawyer for Chu did not immediately return a message seeking comment.Article contentTop StoriesGet the latest headlines, breaking news and columns.There was an error, please provide a valid email address.Sign UpBy signing up you consent to receive the above newsletter from Postmedia Network Inc.Thanks for signing up!A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.Article contentChu, 62, of Miami, was arrested in Florida, while David Goodgame, 49, of Waxahachie, Texas, the company’s former chief operating officer, was arrested in Texas. It was not immediately clear who will represent Goodgame at an initial court appearance.Article contentU.S.
Attorney Jay Clayton told a news conference that Chu repeatedly lied to banks and other credit providers as he turned fraud “into an integral component of Tricolor’s business strategy.”Article contentHe said the collapse of the company dealt a blow to car-buying customers who needed the services of a lending business that catered to people with troubled credit histories.Article content“Of course, if you have something like this happen, if you have fraud in that area, it becomes harder for those people to get auto loans,” Clayton said.Article contentAccording to the indictment, the scope of the fraud was revealed in late August when lenders confronted Chu and other executives about Tricolor’s collateral.Article contentChu 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. After those efforts failed, Chu extracted over $6 million from the company, spending some of it on the August purchase of a multimillion dollar property in Beverly Hills, California, the indictment said.Article contentArticle contentOn Sept. 10, Tricolor filed for Chapter 7 bankruptcy because it owed over $900 million to the company’s largest lenders, the indictment said.Article contentChu could face a mandatory minimum sentence of 10 years in prison and a maximum of life behind bars if he is convicted on the top charge of running a continuing financial crimes enterprise. Other charges include conspiracy, bank fraud and wire fraud. Goodgame was charged with conspiracy, bank fraud and wire fraud.Article contentAuthorities also announced that a former chief financial officer and a former finance executive at Tricolor had pleaded guilty to charges on Tuesday in Manhattan and were cooperating with the government.Article contentTrending 'Why let one person in the States change your life?' For Canadian snowbirds, the stay or go dilemma gets complicated Real Estate Canada's population declines for the first time since the pandemic News Is a $2.75 million portfolio enough for Halifax empty nesters to retire early?
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Personal Finance World watches as Ottawa's bullish shift on LNG puts wind at the back of two major projects Oil & Gas Expect 'dramatically higher' oil prices in 2026, says Eric Nuttall Oil & Gas