Former chief operating officer David Goodgame pleaded guilty on Wednesday to fraud and conspiracy charges linked to the collapse of Tricolor Holdings, a now-bankrupt subprime auto lender. Goodgame entered his plea before U.S. District Judge Kevin Castel in Manhattan. Tricolor was a subprime auto lender that provided loans predominantly in lower-income Hispanic communities across the southwestern U.S. The company filed for liquidation last September.
Goodgame’s guilty plea encompasses six criminal counts, including bank fraud, securities fraud, wire fraud, conspiracy, and making false statements. His lawyer, Arnold Spencer, confirmed that Goodgame has also agreed to cooperate with prosecutors, potentially testifying against former Tricolor Chief Executive Daniel Chu. Goodgame currently remains free on bail.
In December, both Goodgame and Chu were initially indicted for allegedly defrauding creditors and lenders through falsified loan data and double-pledged collateral. Prosecutors have since unveiled an expanded eight-count indictment against Chu, charging him with offences including bank fraud, securities fraud, wire fraud, conspiracy, and running a continuing financial crimes enterprise. Chu’s trial is scheduled for October 19. His lawyer, Matthew Schwartz, maintains his client’s innocence, stating Chu “created a business that enabled thousands of Americans to purchase reliable vehicles.”
The bankruptcy of Tricolor, alongside auto parts supplier First Brands, highlighted the inherent risks within private credit markets, where businesses often operate with less regulatory oversight than those accessing public capital. Separately, a federal judge on June 10 dismissed a lawsuit by investors accusing JPMorgan Chase, Barclays, and Fifth Third of missing “giant red flags” at Tricolor while marketing its debt. All three banks have reported significant nine-figure losses stemming from their exposure to Tricolor.
