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.
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.
Chu, who is accused of engaging in “systemic fraud” over roughly seven years through 2025, used some of the money to buy a “multi-million-dollar property” in Beverly Hills, California, later that month, according to the filing.
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.
Lawyers representing Chu didn’t immediately respond to emails requesting comment on the allegations.
