Abacus: Small Enough to Jail: Introduction (03:01)
George Bailey's character in "It's a Wonderful Life" inspired Thomas Sung to open a bank for immigrants. Cyrus Vance announced the indictment of Abacus in 2012. Mortgages were based on false documentation.
Abacus Origins (03:33)
Sung emigrated to the United States at the age of 16, went to law school, and moved to Chinatown. The Chinese Consolidated Benevolent Association sponsored a school. Sung founded Abacus because no banks in the region would loan to Chinese Americans.
Immigrant Banking System (03:03)
Abacus contained over 8,000 security deposit boxes. Customers began depositing funds and obtaining home loans. Hwei Lin Sung reflects on her daughters working in Chinatown; Thomas wanted to make a difference in the community.
Beginning of Controversy (02:52)
The controversy began in 2009. Ken Yu ran a money-laundering operation through the bank. Jill Sung fired the loan officer, referred the case to the compliance officer, and notified Freddie Mae; the borrower filed a complaint at the local police precinct.
D.A. Investigation (03:48)
Originally, the DA's office focused solely on the employee accused of theft. The compliance officer created binders for the staff. Yiu Wah Wong refused to be interviewed about the fraud committed at Abacus.
D.A. Propaganda (03:12)
Investigators gave the media an opportunity to record ranking officers at Abacus Bank in handcuffs. Raymond Tam and Wong had already been arraigned and posted bond. Chanterelle Sung left the D.A.'s office.
Community Outrage (03:31)
Family associations welcomed Chinese immigrants, providing a sense of community. If vendors complained about unfair tickets from the police, they feared retribution. Abacus officers decided to plead not guilty and fight the allegations.
Abacus Trial: Opening Statements (03:19)
The prosecuting attorney alleged that Abacus routinely falsified and faked mortgage documents, intentionally deceiving the Federal National Mortgage Association. The family shared their feelings about their attorney's argument.
Charges Against Abacus (05:21)
Charges included falsifying business records, residential mortgage fraud, grand larceny, and conspiracy. On the fifth day of the trial, Ken Yu testified as the prosecution's star witness.
Fraud Scheme (03:34)
Almost every major financial company and big bank issued large numbers of home loans and disguised them as high-rated securities to sell to investors. Thomas was not offered the same deal as other financial officers. Vance asserted the investigation was not racially motivated.
Prosecutor's Case (03:39)
The seating chart of the Abacus loan department proved that fraud was centered around Tam's desk. The defense showed that officers attempted to hide misconduct from the underwriters. Wong routinely denied potential loans on the basis of inconsistent financial information.
Abacus Crisis in 2003 (02:55)
Carol Lim embezzled over a million dollars from the Canal Street branch. Abacus Bank went into a liquidity crisis after its clientele withdrew $44 million. Sung appealed to the investors directly.
Family Business (04:43)
Hwei Li did not support Abacus. Chanterelle went to work at the bank with her sisters. The prosecution suggested that the officers induced the borrowers to falsify documents.
Day 52 of the Trial (03:58)
Chinese borrowers did not think they were committing a crime, even if documents were falsified. One individual was approved for an $800,000 loan, despite earning only $24,000 a year. Taxes became an issue because of Chinatown's cash economy.
Fraudulent Documents (03:42)
The prosecution alleged that gift letters were disguised loans. Loan officers at Abacus were listed as gift donors. Yu obfuscated his identity by using his Chinese name.
Family Reactions (04:35)
The Sung family reflects on the five year ordeal; Thomas gets his hair cut. Chanterelle edits a proposed press release. Hwei Lin is embarrassed to see her friends because she does not understand the banking industry.
Larceny Charges (05:28)
Abacus passed off high-risk mortgages to unknowing purchasers. Susan Roma testified that the default rate of the loans was extremely low.
Final Week of Trial (02:34)
The Sung family debates whether Jill should testify at the trial.
Closing Arguments (03:53)
Fannie Mae wrote a letter, conceding that Chinatown was a unique clientele. The prosecution asserted that Abacus deliberately withheld the risks of their mortgages.
Jury Deliberation (07:27)
The judge explained that jurors should not make a general assessment of corporate governance in America, but must decide if Abacus is guilty of any of the allegations. The jury was deadlocked by day 10. The judge issued an "Allen Charge."
Trial Verdict (07:49)
The jury determined that Abacus Federal Savings Bank was not guilty on all charges. Jessica Woodby-Denema did not believe all the elements for each charge were met. The Manhattan D.A. revoked Yu's plea agreement and he was sentenced to six months in jail.
Credits: Abacus: Small Enough to Jail (03:17)
Credits: Abacus: Small Enough to Jail
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