Mexican and American flags attached to vehicles at a Tricolor dealership in Houston, Texas, September 11, 2025.
Marc Felix | Bloomberg | Getty Images
The CEO of the venturesome auto company Tricolor ordered a deputy to send him $6.25 million in bonuses in August as fraudulent schemes supporting the company were dismantled, U.S. prosecutors alleged.
Daniel Chu, CEO and founder of Tricolor, directed CFO 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 Wednesday.
Chu, who is accused of engaging in “systemic fraud” over approximately seven years through 2025, used some of the money to purchase a “multimillion-dollar property” in Beverly Hills, California, later that month, according to the filing.
A few days after Chu’s bonuses were paid, Tricolor placed more than 1,000 employees on unpaid leave. On September 10, the company filed for bankruptcy protection.
Lawyers representing Chu did not immediately respond to emails seeking comment on the allegations.
Prosecutors say Tricolor created approximately $800 million in “false collateral” — at Chu’s direction — by pledging the same assets twice for multiple loans and having employees manually edit records to make the defaulted loans appear eligible as collateral, according to the indictment.
Tricolor’s abrupt collapse is part of a series of defaults that have rocked the U.S. banking sector this fall, raising concerns about underappreciated risks in the U.S. financial system.
At the time the bonuses were paid, Chu knew his company was, in his own words, “basically history,” according to the filing.
Prosecutors cited “secretly recorded” calls in August involving Chu, its chief financial officer and chief operating officer, in which the founder sought ways to keep the company’s lenders at bay.
Although the indictment does not name the banks that Tricolor allegedly defrauded, JPMorgan Chase, Barclays And Fifth Third Bank have disclosed the fees associated with the borrower.
After Tricolor lenders confronted Chu with questions about promised guarantees for the loans, the CEO came up with a lie that some of the manipulated data was linked to a Trump administration loan deferral program, according to the indictment.
He then considered another tactic: accusing banks of ignoring red flags in order to obtain a settlement and keep his business alive, prosecutors said.
In doing so, Chu allegedly compared Tricolor to Enron, the energy company that went bankrupt in 2001 after accounting fraud was discovered.
“Enron obviously sounds good, doesn’t it?” Chu said, according to the documents. “I mean, Enron, Enron makes the lender’s blood pressure go up when they see that.”