Newport Coast couple charged with bank fraud

A Newport Coast couple face up to 30 years in prison for allegedly lying to a consortium of banks in order to establish a $130-million line of credit for their home décor business, federal prosecutors said Thursday.

Thomas Chia Fu, 61, and his wife, Cheri Shyu, 48, are charged with nine counts of bank fraud for submitting allegedly fraudulent business records to Bank of America and other institutions.

The couple are accused of exaggerating business expenses by up to 100 times, according to court records.

Shyu, who also goes by Cheri Fu, owned Galleria USA Inc., a home décor business in Anaheim. Her husband was the chief financial officer, secretary and treasurer.

The couple obtained a $130-million line of credit from Bank of America and other banks starting in 2006, with BofA taking the lead in the consortium in 2008, according to the federal indictment.

According to prosecutors, Galleria USA had to periodically report to the banks its incoming inventory from China, what it carried on-hand in the store and moneys owed to it by customers to justify its line of credit.

According to the indictment, between June 2008 and March 2009, Fu reported tens of millions of dollars worth of inventory coming in from China, and tens of millions more coming to them from customers. The numbers were inflated 10 to 100 times, prosecutors claim.

The pair was arrested without incident and were scheduled to be arraigned in the afternoon in federal court in Santa Ana.

Details from the court proceedings were not immediately available.