Very few banks nationwide have been prosecuted as a result of the 2008 mortgage crisis that sent the American economy into a tailspin. Yesterday, however, New York City District Attorney Cy Vance came down hard on Chinatown-based Abacus Federal Savings Bank, headquartered at 6 Bowery.
The bank and 19 former employees were charged with mortgage fraud and other offenses, in connection with the falsification of Fannie Mae loan documents. The bank, prosecutors alleged, made millions of dollars by making loan applicants seem to be credit-worthy when they really weren’t.
The DA first became aware of the situation at Abacus in 2009, after a bank customer went to the 5th Precinct claiming that the institution had stolen her deposit. Vance said borrowers are continuing to pay almost all of the loans. The bank is not believed to be at risk and borrowers have no reason for concern about their accounts, prosecutors said.
Abacus was founded in Chinatown by Thomas Sung in 1984 and has seven branches. Sung, chairman of the board, and his daughter Jill, who is CEO, were not charged. In a statement released yesterday, Abacus denounced the indictments:
We never imagined our bank would be the target of this investigation, since it is indisputable that the bank itself discovered, investigated and reported the results of its investigation to law enforcement authorities, [and] its regulator, and Fannie Mae. Senior executives at the bank took the immediate, decisive action that initiated this investigation, and there is no evidence that any senior executive at the bank engaged in illegal behavior.
Aside from his prominent role as a Chinatown banker, Mr. Sung is also a well known property owner on the Lower East Side. He owns the Madison Jackson building, a condo conversion, which is just now being marketed to prospective apartment buyers. Sung also owns the Loews Canal Theatre, an abandoned building that some community activists and preservationists hope will one day be reactivated as a performing arts center.
I’m sure it’s all just a simple misunderstanding.
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