Subprime Lender Tricolor to Liquidate Amid Fraud Allegations

Tricolor Holdings, a used car seller and subprime lender that focuses on undocumented immigrants in the US Southwest, filed to liquidate in bankruptcy. US prosecutors are also looking into allegations of fraud by the company.

Dallas-based Tricolor didn’t give a reason for its collapse in its Wednesday filing. But hints of trouble emerged a day earlier, when regional lender Fifth Third Bancorp said it had discovered alleged fraud at one of its clients. People with knowledge of the matter told Bloomberg the client was Tricolor, and that JPMorgan Chase & Co. and Barclays Plc were also bracing for losses on loans tied to the company.