Daniel Chu, founder of Tricolor Holdings, will be tried in October on charges of having defrauded the used car dealership’s banks and investors before the company went bankrupt last year.
During a hearing Thursday, federal Judge Kevin Castel set a trial date for Chu and former Tricolor COO David Goodgame for Oct. 19.. In September, federal prosecutors in Manhattan accused them of operating the company through systematic fraud.
Both have pleaded not guilty.
Prosecutors allege that Tricolor executives, acting under Chu’s orders, repeatedly defrauded banks through schemes that included the double pledging collateral for auto loans and manipulating loan descriptions. They also claim that Tricolor classified the pledged assets as collateral so that virtually worthless assets would appear to meet lenders’ requirements.
JPMorgan Chase & Co., Barclays Plc and Fifth Third Bancorp. have declared that they face losses of hundreds of millions of dollars from Tricolor, which filed for bankruptcy in September after closing more than 60 stores in the southwestern United States.
Two other former Tricolor executives, Jerome Kollar and Ameryn Seibold, have pleaded guilty in the case and are cooperating with the government.
The case is United States v. Chu, 25-cr-00579, United States District Court, Southern District of New York.
