{"id":2441,"date":"2025-12-17T19:10:22","date_gmt":"2025-12-17T19:10:22","guid":{"rendered":"https:\/\/finzexpert.com\/blog\/tricolor-ceo-bonus-paid-out-weeks-before-bankruptcy-prosecutors-say\/"},"modified":"2025-12-17T19:10:22","modified_gmt":"2025-12-17T19:10:22","slug":"tricolor-ceo-bonus-paid-out-weeks-before-bankruptcy-prosecutors-say","status":"publish","type":"post","link":"https:\/\/finzexpert.com\/blog\/tricolor-ceo-bonus-paid-out-weeks-before-bankruptcy-prosecutors-say\/","title":{"rendered":"Tricolor CEO bonus paid out weeks before bankruptcy, prosecutors say"},"content":{"rendered":"\n
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Mexican and American flags attached to vehicles at a Tricolor dealership in Houston, Texas, Sept. 11, 2025.<\/p>\n

Mark Felix | Bloomberg | Getty Images<\/p>\n<\/div>\n<\/div>\n<\/div>\n

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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.<\/p>\n

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.<\/p>\n

Chu, who is accused of engaging in “systemic fraud” over roughly seven years through 2025, used some of the money to buy a “multimillion-dollar property” in Beverly Hills, California, later that month, according to the filing.<\/p>\n

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.<\/p>\n

Lawyers representing Chu didn’t immediately respond to emails requesting comment on the allegations.<\/p>\n

Prosecutors say Tricolor created about $800 million in “bogus collateral” \u2014 at Chu’s direction \u2014 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. <\/p>\n

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.<\/p>\n

Around the time of the bonus payments, Chu allegedly knew his company was, in his own words, “basically history,” according to the filing.<\/p>\n

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.<\/p>\n

While the indictment didn’t name the banks that Tricolor allegedly defrauded, JPMorgan Chase