Sunday 21st January 2018,

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How A New York Chinatown Bank Was Made into a Poster Child for Mortgage Fraud

posted by Louis Chan
Jill, Vera and Thomas Sung in court

Jill, Vera and Thomas Sung in court

By Louis Chan
AsAmNews National Correspondent

Nearly a dozen employees and managers from a small family-run bank in New York’s Chinatown were chained together and paraded before the New York media in handcuffs.

Despite widespread abuse in the mortgage lending industry during the financial meltdown in 2008, Abacus was the only U.S. bank to face criminal charges.

The long ordeal of the subsequent trial and the events that lead up to it is the focus of a documentary Abacus, Small Enough to Jail which will make its New York debut this Friday and then make its way across the country to major cities.

Two bank managers, seven employees and the bank itself were charged in a 240 county indictment back in 2012. They were among 19 former employees charged.

Abacus is run by Thomas Sung and two of his daughters, Vera and Jill. Ironically, another daughter Chanterelle Sung worked in the office of New York District Attorney Cyrus Vance at the time the office filed the charges. She recused herself from the case and eventually resigned.

The movie raises the question whether Abacus was made into a scapegoat for the mortgage meltdown and wonders if their race and culture had anything to do with the prosecution.

10 employees, including Kelvin Yu, would eventually plead guilty to falsifying documents and engaging in fraud.

Yu and several others would testify for the prosecution in the trial against the two bank managers, Yiu Wah Wong, and Raymond Tam, and against the bank itself.

The Sungs thought they were doing the right thing when they saw some irregularities in their loan records and reported it to authorities. The investigation broadened beyond the Sungs expectations and suddenly they themselves became suspects.

“The most important point for us is that as soon as we discovered the wrongdoing, we acted immediately with the firing of Ken Yu the next business day, the initiation of an internal investigation, the reporting to law enforcement, our regulator and Fannie Mae, and subsequent terminations of some other bad actors,” said the Sungs in a statement to AsAmNews.

Director Steve James, producer Mark Mitten and co-producer Nick Verbitsky give their audience great insight into what happened. The two gained access not only to the Sung family, but the District Attorney’s office and later the jurors. This access gives viewers an inside look at a trial that was largely ignored by the mainstream media.

“Putting this bank on trial represents the unequal application of justice that is rampant in America,” said James to AsAmNews.

The family puts it more bluntly.

“We believe that racism and cultural bias played a key role in the prosecution,” the family said. “The DA Office’s perception of the Chinese American community as passive underlined not only their decision to pursue our Bank, but also the means and methods in which they pursued the case. Instead of protecting the vulnerable, the DA’s Office preyed upon this immigrant community’s legitimate fear of government and used this fear to build as bogus case.”

They said some employees were threatened with separation from their grandchildren and loss of their immigration status.

Steve James

Director Steve James

“I think the District Attorney’s office believed in their case,” said James. “But I also think they wanted to make their mark by being the first office to criminally indict a bank in the wake of the 2008 mortgage crisis. The only problem with that is that Abacus in no way resembled the banks during that crisis. Despite what the DA said during the indictment, Abacus had not engaged in any of the sweeping and unethical practices of the big banks.

The family remains resentful even today at the prosecution, calling The DA’s office “no more than a common bully.” They deny the action of its employees were symptomatic of a larger problem with the bank itself.

“The very employees we terminated had been recruited by the DA’s Office to manufacture “evidence” against the Bank. Obviously this turned against the DA’s Office during trial, when many of their witnesses, particularly Ken Yu, blatantly perjured themselves on the stand,” the family said. “One of our lawyers said, “Remember you fired Ken Yu – the DA’s Office hired him afterwards.”

Vera, Jill and Thomas Sung

Vera, Jill and Thomas Sung

Much of the film takes place around the Sung family dinner table. During the five years leading up to the trial, conversation about the case dominated discussion. The tremendous stress each family member faced is evident, but so are their diverse personalities and the dynamics of the Sung family.
James said the Sung family’s weathered this five year ordeal with “humor, grace, and courage.”

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