The former chairwoman of the International Real Estate Council of Georgia pleaded guilty to defrauding clients of more than $22 million, the U.S. attorney for the Northern District of Georgia announced Friday.
Emily Moerdermo Fu , 57—chairwoman and founder of Suwanee-based real estate investment and advisory firm Capital Investment International Inc.—pleaded guilty on Thursday to one count of mail fraud. A sentencing date has not been set.
“Real estate professionals who embezzle their clients’ investment funds threaten the integrity of our real estate market,” said U.S. Attorney Byung J. “BJay” Pak, while cautioning investors to “remain vigilant against fictitious loans, made-up closings, and other schemes by licensed professionals before they invest their monies.”
Fu’s defense lawyer, Paul Kish, said, “It’s always sad when somebody gets into a financial situation where they end up doing something they otherwise wouldn’t do. But the first step is always admitting that you’ve done something wrong. And Ms. Fu did that yesterday in court.”
Before her arrest last year, Fu established multiple investment companies for clients intent on buying commercial real estate in several metro Atlanta, according to court records and federal prosecutors. Her firm also offered property management, consulting and brokerage services.
Last November, a Chinese investor with companies in China and Georgia discovered that Fu had embezzled nearly $1 million while managing his investment properties. Fu acknowledged the theft but apologized and promised to repay the money, according to court records. When Fu failed to repay the funds, instead hopping on a flight to Ecuador, her investor sued.
Meanwhile, other investors who had formed a partnership to buy Sugarloaf Center, a Gwinnett County shopping center, and hired Fu to manage the company, discovered that Fu had not arranged the shopping center purchase but instead had misappropriated nearly $1.6 million in capital, according to court records.
The investors also discovered that Fu—tasked with arranging a $5.65 million commercial real estate purchase in Walton County and a $1.4 million purchase of a Buckhead medical center. But, prosecutors say, the properties were never purchased for the investors who put up the money to buy them and were, instead, sold to someone else.
Last November, investors also discovered that a Cumming shopping center Fu was supposed to have purchased with $15 million in cash was actually bought, in part, with a $6 million loan. The security deed bore Fu’s signature as president of the partnership that made the purchase, although she was not a partner and was never given authority to secure a loan.
Prosecutors said that, although Fu assured investors she had bought the property, she had pocketed their money, prosecutors said.