Former executives of bankrupt used car dealer Tricolor indicted

Four former executives at bankrupt subprime auto dealer Tricolor were indicted on federal charges, with the Justice Department alleging massive fraud.

Federal prosecutors announced the indictments Wednesday of four former executives at bankrupt subprime auto dealer Tricolor, alleging they engaged in a multi-year "systemic fraud" scheme.

Tricolor founder Daniel Chu, former chief operating officer David Goodgame and former executives Jerome Kollar and Ameryn Seibold were charged in what the U.S. Attorney’s Office for the Southern District of New York claimed was "a series of frauds directed at each of Tricolor’s lenders."

"At Chu's direction, multiple Tricolor executives repeatedly defrauded lenders using various fraudulent schemes including 'double-pledging' collateral - pledging assets to support one loan and then pledging the same assets to another lender to support another loan," prosecutors allege in a filing.

Shortly after announcing the indictments, prosecutors revealed that two defendants, Kollar and Seibold, had already pleaded guilty, and "both are cooperating with the government."

Jay Clayton, the U.S. Attorney for the Southern District of New York, described Tricolor as a "financial crimes enterprise" at a press conference Wednesday.