Couple Arrested on Federal Charges of Bilking Banks Out of $130 Million in Line of Credit Scam
A Newport Coast (California) couple were arrested yesterday after being indicted on federal charges of defrauding a consortium of eight banks, including Bank of America, out of approximately $130 million.
Thomas Chia Fu, 61, and his wife, Cheri L. Shyu (also known as Cheri Fu), 48, were arrested without incident at their residence by federal authorities.
A federal grand jury returned a nine-count bank fraud indictment against the Fus on March 9.
The Fus owned an Anaheim company called 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 eight banks, and they borrowed on this line of credit by exaggerating--allegedly as much as 100 times--the company's in-transit inventory and accounts receivables. The Fus also allegedly fabricated bills of lading and invoices to support the exaggerated numbers and hide Galleria's true financial status.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty.
Each charge of bank fraud carries a statutory maximum sentence of 30 years in federal prison.
The case was investigated by the Office of the Special Inspector General for the Troubled Asset Relief Program, the Federal Bureau of Investigation, and the United States Secret Service.