Tricolor Trustee Is Probing Fraud of ‘Extraordinary Proportion’

Bankrupt subprime auto lender Tricolor Holdings appears to have been a “pervasive fraud” of “extraordinary proportion,” a lawyer helping oversee its liquidation said in court Friday, underscoring the scale of the company’s alleged misconduct even as investigators continue to unravel its finances.

Initial reports “indicate potentially systemic levels of fraud,” according to a presentation made in court by Charles R. Gibbs, who is representing the court-appointed trustee.

While Gibbs didn’t elaborate on the nature of the fraud, a preliminary examination of Tricolor’s records shows that at least 29,000 loans pledged to creditors were tied to vehicles already securing other ...