\n<\/p>\n
Executives at Tricolor Holdings, the bankrupt subprime auto lender, were charged on Wednesday over their alleged roles in what US prosecutors described as a years-long, \u201csystematic fraud\u201d scheme.<\/p>\n
Daniel Chu, the company\u2019s founder and former CEO, was charged in an indictment unsealed in Manhattan federal court with directing multiple executives since 2018 to defraud investors and lending institutions through multiple schemes.<\/p>\n
A defense lawyer did not immediately return a message seeking comment. Tricolor filed for chapter 7 bankruptcy in September, heightening scrutiny of private credit and its influence in the global economy.<\/p>\n
\u201cAs alleged in the indictment, CEO Daniel Chu was the leader of an elaborate scheme to defraud creditors of Tricolor,\u201d said Jay Clayton, a US attorney, in a statement. \u201cAt his direction, Tricolor repeatedly lied to banks and other credit providers, including by falsifying auto-loan data and \u2018double pledging\u2019 collateral.<\/p>\n
\u201cFraud became an integral component of Tricolor\u2019s business strategy. The resulting billion-dollar collapse harmed banks, investors, employees and customers.\u201d<\/p>\n
The scope of the alleged fraud was revealed this summer, when lenders confronted executives including Chu about Tricolor\u2019s collateral, according to the indictment, which alleges that Chu \u201cconcocted plans to conceal or explain away the fraud\u201d in a series of secretly recorded phone calls.<\/p>\n
After such efforts failed, Chu extracted over $6m from the company, the indictment said, adding that Tricolor later filed for bankruptcy because it owed over $900m to the company\u2019s largest lenders, the indictment said.<\/p>\n
Chu received two payments from Tricolor totaling $6.25m, according to the indictment, which claims that he used some of this money to buy a multimillion-dollar property in Beverly Hills, California.<\/p>\n
Associated Press contributed reporting<\/em><\/p>\n","protected":false},"excerpt":{"rendered":" Executives at Tricolor Holdings, the bankrupt subprime auto lender, were charged on Wednesday over their alleged roles in what US prosecutors described as a years-long, \u201csystematic fraud\u201d scheme. Daniel Chu, the company\u2019s founder and former CEO, was charged in an indictment unsealed in Manhattan federal court with directing multiple executives since 2018 to defraud investors<\/p>\n","protected":false},"author":1,"featured_media":37973,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[49],"tags":[17032,15848,5330,2967,5075,20887,20885,150,15444,20886],"class_list":{"0":"post-37972","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-auto","9":"tag-bankrupt","10":"tag-charged","11":"tag-executives","12":"tag-fraud","13":"tag-holdings","14":"tag-lender","15":"tag-news","16":"tag-subprime","17":"tag-tricolor"},"_links":{"self":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/37972","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=37972"}],"version-history":[{"count":0,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/37972\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/media\/37973"}],"wp:attachment":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=37972"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=37972"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=37972"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}