--- title: "Tricolor CEO received a $6.25 million bonus weeks before company’s bankruptcy, prosecutors say" type: "News" locale: "en" url: "https://longbridge.com/en/news/270047564.md" description: "Tricolor CEO Daniel Chu received a $6.25 million bonus weeks before the company's bankruptcy, amid allegations of systemic fraud. Prosecutors claim Chu directed fraudulent schemes, including creating $800 million in bogus collateral, leading to Tricolor's collapse. The company filed for bankruptcy on Sept. 10, affecting over 1,000 employees. Chu allegedly compared the situation to Enron, seeking ways to keep lenders at bay. Banks like JPMorgan Chase and Barclays disclosed charges tied to Tricolor." datetime: "2025-12-17T17:51:08.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/270047564.md) - [en](https://longbridge.com/en/news/270047564.md) - [zh-HK](https://longbridge.com/zh-HK/news/270047564.md) --- # Tricolor CEO received a $6.25 million bonus weeks before company’s bankruptcy, prosecutors say Mexican and American flags attached to vehicles at a Tricolor dealership in Houston, Texas, US, on Thursday, Sept. 11, 2025. Mark Felix | Bloomberg | Getty Images The CEO of subprime auto firm Tricolor directed a deputy to send him $6.25 million in bonuses in August as fraudulent schemes propping up the company unraveled, U.S. prosecutors alleged. Daniel Chu, the CEO and founder of Tricolor, told Chief Financial Officer Jerome Kollar to send the final two payments of his $15 million annual bonus on Aug. 19 and 20, according to a federal indictment unsealed on Wednesday. Chu, who is accused of engaging in "systemic fraud" over roughly seven years through 2025, used some of the money to buy a "multi-million-dollar property" in Beverly Hills, California, later that month, according to the filing. Within days of Chu's bonus payments, Tricolor put more than 1,000 employees on unpaid leaves of absence. By Sept. 10, the company filed for bankruptcy protection. Lawyers representing Chu didn't immediately respond to emails requesting comment on the allegations. Prosecutors say Tricolor created about $800 million in "bogus collateral" — at Chu's direction — by double-pledging the same assets for multiple loans and by having employees manually alter records to make delinquent loans appear eligible as collateral, according to the indictment. The abrupt collapse of Tricolor was one of a string of defaults that churned the U.S. banking industry this fall, sparking concerns over underappreciated risks in the American financial system. Around the time of the bonus payments, Chu allegedly knew his company was, in his own words, "basically history," according to the filing. Prosecutors cited "secretly recorded" calls in August that included Chu, his CFO and chief operating officer where the founder cast about for ways to keep the company's lenders at bay. While the indictment didn't name the banks that Tricolor allegedly defrauded, JPMorgan Chase, Barclays and Fifth Third Bank have disclosed charges tied to the borrower. After Tricolor's lenders confronted Chu over questions about collateral pledged for loans, the CEO proposed a lie that some of the manipulated data was tied to a Trump administration loan deferment program, according to the indictment. He then considered another tactic: Blaming the banks for ignoring red flags as a way to extract a settlement and keep his company alive, prosecutors said. In doing so, Chu allegedly compared Tricolor with Enron, the energy company that collapsed in 2001 after the discovery of accounting fraud. "Enron obviously has a nice ring to it, right?" Chu said, according to the documents. "I mean, Enron, Enron raises the blood pressure of the lender when they see that." ### Related Stocks - [603516.CN](https://longbridge.com/en/quote/603516.CN.md) ## Related News & Research - [The defense in Andrew Left's fraud trial is hammering down on a simple question: Can people disagree about stocks?](https://longbridge.com/en/news/286342515.md) - [15:24 ETMcCabe Law Announces Court Finding of Brady Violations in Deborah Nicholls Case](https://longbridge.com/en/news/286145893.md) - [Court overturns Alex Murdaugh’s murder convictions and orders new trial](https://longbridge.com/en/news/286285619.md) - [Hisense Home Appliances Deploys RMB1.81 Billion into Chongqing Trust Wealth Products](https://longbridge.com/en/news/286888326.md) - [Strix Discloses Trust-Led Share Tender by Non-Executive Director](https://longbridge.com/en/news/286884952.md)