Tricolor Execs Indicted; Recordings Catch Cover-Up in Progress

Federal prosecutors unsealed an indictment charging Tricolor Holdings CEO Daniel Chu with orchestrating a seven-year fraud scheme that left lenders holding more than $900 million in losses.¹ Chu faces a continuing financial crimes enterprise charge carrying a mandatory 10-year minimum and potential life sentence. COO David Goodgame faces bank fraud and wire fraud charges. Both were arrested the same day.

The indictment confirms what our September coverage flagged at the Chapter 7 filing and what October's deep dive on the double-pledging mechanics detailed: systematic collateral fraud across multiple warehouse relationships over years. What's new is the recordings, the charges, and the cooperating witnesses.

The Recordings

Secret recordings made by an unnamed cooperating executive—now revealed to be part of the government's case—captured Tricolor's leadership devising cover stories as lenders closed in last August.²

When warehouse lenders confronted Chu about discrepancies in collateral data, he proposed blaming the problems on a fictitious "Trump administration deferment policy" that never existed.¹ In the same call, Chu acknowledged the lie would collapse under scrutiny: "Where we would have an issue is if they sent an auditor and they said, pull this up on your screen, right, that would be a problem." CFO Jerome Kollar agreed: "Yes. That would be bad."

On another recorded call, Chu pivoted to offense. He compared Tricolor's situation to Enron and proposed using that comparison as leverage against lenders seeking to recover losses.³ The strategy: threaten lenders with reputational damage from being associated with a fraud scandal to extract favorable settlement terms.

"Enron obviously has a nice ring to it, right?" Chu said, laughing. "Enron raises the blood pressure of the lender when they see that. Who wants to be thrown in that category?"¹

Chu later called the Enron comparison "fucking perfect."

The recordings also captured Chu directing executives to use AI tools to research Enron-related litigation and extract language for lender negotiations.⁴ This wasn't panic—it was preparation.

Three weeks before Tricolor placed 1,000 employees on unpaid leave, and while Chu acknowledged the company was "definitely insolvent," he directed Kollar to pay him the final installments of a $15 million bonus.¹ Chu received $6.25 million on August 19-20. He used part of the funds to purchase a multimillion-dollar property in Beverly Hills on August 27.

The Defendants

Daniel Chu, 62, CEO and founder: Continuing financial crimes enterprise (mandatory 10-year minimum, up to life), conspiracy to commit bank fraud and wire fraud, bank fraud, wire fraud affecting a financial institution.

David Goodgame, 49, COO: Conspiracy to commit bank fraud and wire fraud, bank fraud, wire fraud affecting a financial institution. Maximum 30 years per count.

Jerome Kollar, 62, former CFO: Pleaded guilty December 16. Cooperating with prosecutors. Faces charges including securities fraud and destruction of records.

Ameryn Seibold, 31, former finance executive: Pleaded guilty December 16. Cooperating with prosecutors.

The Lender Damage

Updated loss figures from bank disclosures and court filings:

• Fifth Third Bancorp: $200 million impairment charge⁵

• JPMorgan Chase: $170 million write-off⁶

• Barclays: Exposure undisclosed but reportedly significant

At bankruptcy, Tricolor's largest lenders were owed more than $900 million resulting from fraudulent double-pledging and collateral manipulation.¹ The company had pledged $2.2 billion in collateral but held only $1.4 billion in real assets—an $800 million gap.

Tricolor is the second major warehouse fraud collapse in four months. First Brands filed for bankruptcy in September under similar allegations—collateral manipulation, lender losses in the hundreds of millions, questions about how the scheme evaded detection across multiple bank relationships.

JPMorgan CEO Jamie Dimon's October warning lands differently now: "When you see one cockroach, there are probably more. Everyone should be forewarned on this one."⁶

Two cockroaches in four months. Institutional capital is watching.

What's Next

Two cooperating witnesses—the CFO and a senior finance executive—suggest prosecutors are building toward additional charges. The SEC has been assisting with the investigation, per the DOJ announcement, which points toward potential enforcement action on Tricolor's ABS disclosures.¹

Chu and Goodgame were arrested December 17. Trial dates have not been set.

This story continues.

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