Tricolor Founder, Ex-COO Plead Not Guilty to Fraud Charges

Tricolor Holdings founder Daniel Chu and former Chief Operating Officer David Goodgame pleaded not guilty to charges that they conspired to defraud lenders and investors in the bankrupt subprime auto lender.

The two men entered their pleas Tuesday during an appearance before US District Judge Kevin Castel in Manhattan. Prosecutors indicted them last month, saying Chu directed a scheme that included “double-pledging” auto loan collateral, manipulating descriptions of the loans and classifying “near-worthless” assets as meeting lenders’ collateral requirements.

Daniel Chu, founder and chief executive officer of Tricolor Holdings, arrives at federal court in New York on Jan. 13.

Photographer: Bing Guan/Bloomberg

Tricolor filed for bankruptcy in September after shutting down more than 60 locations across Texas and the US Southwest. Lenders ...