U.S. District Judge Cormack Carney, from Orange County in Southern California, considered the economic depression that happened in 2008 that lead Cheryl Fu to make fraudulent bank transactions to keep her business afloat. On the 25th of February, Cheryl Fu was sentenced to 36 months of imprisonment; she pleaded guilty of bank fraud. Meanwhile, creditors’ (of Fu’s business) counsel and government attorneys argued for 46 months of imprisonment instead of 36 months.

Fu’s counsel, Steven Katzman, argued for a lesser sentence for Cheryl Fu that would be more appropriate. Attorney Katzman, of Bienert, Miller & Katzman, PLC, argued that Cheryl Fu only committed such a crime to keep her family’s business Galleria USA, Inc. Attorney Katzman argued that his client was not motivated out of greed, but was motivated to save the family’s business. Fu’s business, the Galleria USA, was doing great until the economic recession last 2008.

Cheryl Fu and Thomas Fu (her husband), run and operate the Galleria USA, a home décor business based in Anaheim. The business imported Chinese home decors and furnishings and they sold to TJ Maxx, Home Depot, Costco, and Lowe’s. Aside from the Galleria USA, Cheryl and Thomas Fu also had a home décor shop in China, the branch of Galleria in Hong Kong. The Galleria H.K. was placed under liquidation.

In March 2011, the Bank of America, and six other banks, filed a lawsuit against Cheryl and Thomas Fu regarding $130 million worth of a revolving line of credit. In January, Cheryl Fu pleaded guilty and admitted that she submitted fraudulent reports, overstating the receivables of their business to tens of millions. Her fraudulent reports led the banks to lend them $4.7 million, an amount which they would not receive otherwise.

During court trials, the liquidator of Galleria H.K. and the Bank of America presented that the Fu’s lost $200 million since 2001. However, Attorney Katzman argued that Fu’s business was doing well until the economic crisis in 2008. Attorney Katzman further added that the Bank of America forced and pressured the Fu’s to pay $40 million in credit. The Fu’s tried to pay by using their own capital. However, the Fu’s were still short of funds, which led them to make the decision, which they regret, of falsifying Galleria’s receivable reports. Katzman also told the court that Galleria was successful and was even considered as Home Depot’s Partner of the Year in 2007. Furthermore, Mrs. Fu started new businesses, serving the same clients, without the help of bank financing, after the downfall of Galleria USA.

Based on the evidence presented, the court did not hear the appeal of the government attorneys and of the counsel of the Bank of America for a longer sentence of imprisonment. Instead, the court sentenced Mrs. Fu with 36 months of imprisonment and required her to pay $4.7 million. Using the profits she earned from a new business, Mrs. Fu paid $250,000 already. Visit BMKattorneys.com for more information on the law firm and cases like this one.