![]() ![]() In May of 2012, District Attorney Cyrus Vance, Jr. When one of them went to the police, the Manhattan District Attorney’s Office got involved. Yu was also extorting money from borrowers. The bank immediately reported the matter to the appropriate bank regulators and hired a consultant to unearth the full extent of the fraud. In December of 2009, Vera Sung discovered that Ken Yu, one of Abacus Bank’s loan originators, was writing “liar loans,” i.e., loans supported by false documentation of such information as the borrower’s job titles, income, and sources of down payment. Finally, Abacus illustrates the importance of informal and flexible lending practices to bringing the unbanked and underbanked members of racial and ethnic minorities into the formal market for financial services and credit, a notion known as “the democratization of credit.” Second, Abacus exposes the incompetence of a prosecution that, in failing to understand the cultural context of an ethnic minority bank and its customers, winds up exploiting and reinforcing economic stereotypes and biases about them. First, Abacus provides a window into the operation of a small family-run, community-focused ethnic bank, both in general and in a time of crisis. The film offers three very important insights on economic equality and minority-group advancement. The bank was the only financial institution tried for mortgage fraud in the wake of the subprime lending debacle that led to the Great Recession of 2008.Ībacus: Small Enough to Jail, a documentary by Steve James, follows the course of the criminal proceedings from the perspective of the Sungs. One of his daughters (Jill) is its president and CEO and another (Vera) is a director and its closing attorney. It was founded by Thomas Sung, a Chinese American, in 1984. Vance who headed up the case.Steve James presents the story of the Sungs and their struggle to save their family-run Chinatown bank from a misguided prosecution based on cultural incompetence.Ībacus Federal Savings Bank is a small institution that is headquartered in Manhattan’s Chinatown and serves an Asian American and Asian immigrant population. 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. ![]()
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