Orange County Couple Pleads Guilty to Federal Fraud Charges for Bilking Banks Out of Nearly $5 Million
| U.S. Attorney’s Office January 26, 2012 |
SANTA ANA, CA—A Newport Coast couple pleaded guilty this morning to defrauding a consortium of seven banks, including Bank of America, in connection with a $130 million line of credit.
Thomas Chia Fu, 63, and his wife, Cheri L. Shyu (also known as Cheri Fu), 60, owned Anaheim-based Galleria USA, Inc., which imported home decor items manufactured in China. The Fus obtained a $130 million revolving line of credit for Galleria from a consortium of seven banks. In connection with that revolving line of credit, the couple overstated by tens of millions of dollars the accounts receivables of the company—lies they told the banks in order to continue borrowing funds under the revolving line of credit, according to plea agreements filed in this case. The Fus also admitted to falsifying in Galleria’s computer system the accounts receivable amounts by a factor of 10 or more times the actual amount purchased to support the exaggerated numbers and hide Galleria’s true financial status.
The banks suffered an estimated loss of $4.7 million on the revolving line of credit from October 2008 to July 2009.
The Fus pleaded guilty this morning before United States District Judge Cormac J. Carney. Cheri Fu is scheduled to be sentenced by Judge Carney on July 9, and Thomas Fu is scheduled to be sentenced on July 30.
At sentencing, the Fus each face a statutory maximum sentence of 30 years in federal prison.
This case was investigated by the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), the Federal Bureau of Investigation, and the United States Secret Service.
“In 2008, American taxpayers stepped up to help our nation’s banks, while the Fus concocted a scheme to swindle them,” said Christy Romero, Deputy Special Inspector General for SIGTARP. “Today, the Fus pled guilty to using a false second set of books to defraud seven banks, including TARP recipients Bank of America and United Commercial Bank, out of loans that resulted in millions of dollars in bank losses. Defrauding institutions that received TARP funds is simply defrauding American taxpayers. SIGTARP will aggressively uncover and investigate fraud, waste and abuse related to TARP and actively support the prosecution of these crimes to ensure accountability and justice.”
SIGTARP investigates fraud, waste, and abuse in connection with the Troubled Asset Relief Program (TARP). To report suspected illicit activity involving TARP, call the SIGTARP Hotline at 1-877-SIG-2009 (1-877-744-2009).
CONTACT: Assistant United States Attorney Jeannie M. Joseph (714) 338-3576