It is important that the consequences of the litigation brought against Abacus Bank are remembered and studied, so as to hold prosecutors such as Vance accountable for the ways in which they exercise prosecutorial discretion, and to encourage prosecutors to remain aware of cultural context and implicit biases when targeting businesses that cater to underserved minority communities. Vance has been met with harsh criticism that he pushed the boundaries in his aggressive pursuit of a “lowest hanging fruit” family-run bank that fills a necessary void by catering to the Chinese American minority community. To date, Abacus Bank remains the only financial institution criminally prosecuted in connection with the 2008 financial crisis. Ultimately, after a five year investigation by the DA and four-month long jury trial, Abacus Bank was found not guilty on all charges. ![]() Prosecutors alleged that Abacus and nineteen of its employees had systematically defrauded the Federal National Mortgage Association (Fannie Mae) by allowing borrowers to lie about their income and assets on the government-sponsored mortgage company's proof-of-employment forms. The media was treated to a spectacle as the indicted Chinese-American Abacus employees were handcuffed, chained together, and marched by law enforcement down the narrow hallway of the New York City courthouse in front of cameras. Nevertheless, on May 31, 2012, the New York County District Attorney's Office (DA) announced criminal charges against Abacus Bank in a 184-count indictment. Abacus avoided the fallout of the crash because it never invested in mortgage-backed securities, nor did it ever originate any subprime mortgages. Abacus Bank also was not an institution that required financial assistance from the government in the wake of the burst of the housing bubble. Abacus Federal Savings Bank (Abacus Bank or Abacus), a family-run community bank based in NYC's Chinatown catering primarily to Chinese immigrants, was not amongst these failed institutions. The financial crisis resulted in 489 bank failures from 2008 through 2013. When the housing bubble burst, hundreds of billions of dollars in losses in mortgages and mortgage-related securities shook markets as well as financial institutions around the world. In the fall of 2008, interest rates, easy and available credit, scant regulation, and toxic mortgages culminated in the collapse of the housing bubble and ultimately, full-blown financial crisis. Vance who headed up the case.Excerpted From: Chloe Chung, Asian American-owned Banks Do Count: No Wrongful Jailing of Abacus Bank, 25 Asian Pacific American Law Journal 79 (2021) (452 Footnotes) (Full Document) ![]() James - who was also behind “Hoop Dreams” and “Life Itself” - sat down with several members of the prosecution, including Manhattan District Attorney Cyrus R. That’s what’s very infuriating and actually is quite concerning because it creates a reverse incentive.Ībacus was charged with 240 counts including grand larceny, falsifying documents, conspiracy and mortgage fraud. Compared to the larger institutions that appeared to cover things up or wanted to turn their back away from it and not recognize what was happening, we said, “OK, here’s something we’re investigating, we’re letting you know, we’re telling you.” But instead we were punished as if we were the bad actors who were not good eggs and were let go. ![]() The most appalling and shocking thing to us was that we actually thought we were doing the right thing. The sisters notified authorities, but were surprised when the investigation turned to them. Back in 2009, Jill and Vera Sung, who now run the bank with their father, discovered evidence that several of their employees were committing fraud. The bank specializes in loaning to residents of Chinatown, most of whom are immigrants. In a new documentary film, “ Abacus: Small Enough to Jail,” filmmaker Steve James tells the story of the Sungs, the family of a now 82-year-old Chinese immigrant named Thomas Sung who started Abacus in 1984.Ībacus is the 2,531st largest bank in the country, with assets that are a mere 1/100th of one percent that of Bank of America. In 2010, the New York District Attorney’s office charged Abacus Federal Savings Bank of Chinatown, New York with mortgage fraud.Ībacus became the only bank prosecuted for the financial crisis.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |