After the 2008 financial crisis took millions of investment dollars from Americans, shell shocked financial advisers and briefly turned the country upside down, only one bank was indicted: Abacus Federal Savings in Chinatown, New York — the 2,531st largest bank in the U.S.
Founded by Chinese-American immigrant Thomas Sung in the 1980s, the bank has six branches in three states and primarily serves the Chinese community. Federal prosecutors indicted it in 2009 for mortgage fraud, securities fraud, and conspiracy after it reported to regulators it had discovered a loan officer was laundering money there.
Rather than plead guilty, the Sungs went to court. A new documentary from Oscar-nominated “Hoop Dreams” director Steve James follows the subsequent legal battle, which plays out in the film as a David and Goliath tale of a small bank taking the fall for the financial crisis over an isolated incident with a corrupt loan officer.
“Too big to fail turns into small enough to jail, and Abacus is small enough to jail,” journalist Matt Taibbi says in the film, calling the bank “as easy a target as you could possibly pick.”
With an intimate view of the fight for innocence from a stoic Thomas Sung, his razor sharp daughters (all lawyers), and his fiery wife, it’s clear the film has a sympathetic eye for Abacus as it goes up against the U.S. government, frequently comparing Thomas Sung to George Bailey in his wife’s favorite film, “It’s a Wonderful Life.”
“It seemed clear to us as filmmakers that this bank was the mirror opposite of the big banks,” director Steve James told MarketWatch in a recent interview, noting that the Sungs reported the fraud discovered at the bank themselves. “Yet they were the ones singled out, and it kind of leads one to the conclusion that this was about planting a flag and getting a trophy to be the one prosecutor, since the feds didn’t prosecute any big banks.”
Manhattan District Attorney Cyrus R. Vance Jr. argued that there was fraud widespread enough to warrant an investigation. In May 2012, he announced charges against the bank, two supervisors, and nine former employees — 184 counts including residential mortgage fraud, security fraud, conspiracy, and falsification of business records.
As the film expresses, the indictment put on trial not just the bank itself, but the reputation of Chinese immigrants and the cash culture of Chinatown. As Jill Sung, one of the daughters, notes at one point in the film, many of their members had never used a bank before. Now, with the movie’s premiere in New York on May 19 and…