Louis Proyect: The Unrepentant Marxist

May 18, 2017

Abacus: Too Small to Jail

Filed under: Film — louisproyect @ 10:53 pm

Opening tomorrow at the IFC Center in NYC, “Abacus: Too Small to Jail” is a documentary that chronicles the five year legal struggle of the founder, top officers (his daughters) and lower-level staff to defend themselves against District Attorney Cyrus Vance Jr. (the son of Jimmy Carter’s Secretary of State) who charged them with bank fraud felonies having absolutely no merit.

The Abacus Federal Savings Bank was a mom-and-pop operation located on the Bowery in Chinatown between a herb medication shop and a noodle parlor. It was founded by lawyer and real estate investor Thomas Sung in 1985 to meet the needs of the immigrant community that distrusted the big banks that operated in Chinatown. Even if they had Chinese tellers and managers, it was nearly impossible for an immigrant to get a loan or a mortgage.

Things were going very well for the bank until 2009 (it had expanded to six branches) when a loan officer ripped off a husband and wife looking to buy their first home. He conned them into giving him $2500 as a way of lubricating the deal and falsified the papers needed for the closing. The couple lost their $72,000 deposit, more than two years salary. They reported the theft to the police, naming the loan officer as the culprit. By then, Thomas Sung had fired the loan officer, opened up an internal investigation and reported the findings to the police and federal authorities.

Normally, this would have not been treated as a criminal case and the bank would have offered restitution to the couple but that would not satisfy Cyrus Vance Jr. Instead he decided to prosecute the bank, two of its supervisors, and nine of its former employees on a hundred-and-eighty-four-count indictment that included charges of residential-mortgage fraud, falsification of business records, and conspiracy. The Abacus employees, all Chinese-American, were paraded through the Manhattan Criminal Courthouse, handcuffed together, as if they were members of a drug cartel. Some faced a maximum sentence of twenty-five years in prison.

Could it not be more obvious that they were scapegoats in a case that was in sharp contrast to Citibank, Chase Manhattan and Bank America not suffering a single arrest even though trillions of dollars were lost because of fraud?

It turned out that with only a handful of exceptions, everybody who applied for a loan at Abacus was treated fairly. The problem for the bank is that many of the loan applications seemed fishy. It was not unusual for someone that declared $25,000 income on their tax returns would be eligible for an $800,000 mortgage. The prosecution made the case that the bank was committing fraud in the same way that the banks were pushing low interest loans to low-income people whose mortgages were collateralized and packaged as very secure investments. What the defense attorney attempted to show was that the Chinatown bank customer operated in a cash economy and that the reported income did not reflect their true wealth. When one defendant was asked how they knew the customer would be able to pay off the mortgage, he replied that he eats at his restaurant every week and knows that he was very solvent.

While most of the film examines the hypocrisy of the prosecutors against the backdrop of Chinese immigrant culture, the most appealing part of the film was the unintentional comedy of bank CEO Thomas Sung and his three daughters who were constantly bickering with their unflappable father.

The film continually refers back to the Frank Capra chestnut “It’s a Wonderful Life” that has a plot similar to this documentary. I enjoyed the documentary much more.

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