Business Week has filed a lengthy piece on Abacus Federal Savings Bank, the Chinatown-based institution that is the target of a very rare mortgage fraud prosecution. Last spring, 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 Business Week story, titled “Mortgage Fraud Prosecutors Pounce on a Small Bank,” suggests that the decision by the New York City District Attorney to go after Abacus is, at least, curious and possibly misguided.
The report notes that Abacus, a fixture in Chinatown since the mid-80’s, has not lost business as a result of the prosecution, but has not picked up many new customers, either. The indictments, Business Week says, could eventually force Abacus out of business. The story features interviews with the bank’s founder, Thomas Sung, and his daughters Jill and Vera. They have not been personally indicted.
Reporter Drake Bennett points out that no other bank nationwide has been held criminally responsible (as an institution) for the mortgage fraud debacle that sunk the U.S. economy:
If the point was to send a message to Wall Street, the bank was a curious choice. Few people outside the Chinese-American community have ever heard of Abacus. Compared with the whales of global finance, it’s plankton, with roughly one ten-thousandth the assets of JPMorgan Chase. And unlike the defaults that crippled Countrywide and Washington Mutual and Fannie Mae—and, through them, the world financial system—Abacus’s loans get paid back.
Thomas Sung is also a longtime real estate investor in Chinatown and the Lower East Side. He owns the Madison Jackson Building, the condo conversion that is now being re-imagined as a luxury rental complex, as well as the shuttered Loew’s Canal Theatre.
You can read the complete Business Week story here.