In the worldwide banking crisis of 2008, many big banks (Bank of America, JP Morgan Chase, Citibank, Wells Fargo among them) were committing fraud in the mortgage market. They paid fines, but they also got massive taxpayer-funded bailouts because they were “too big to fail”, (i.e., their failure could destroy the economy). None of the large banks or their officers were every indicted of crimes. In Abacus: Small Enough to Jail documentarian, Steve James shows us the other end of the financial spectrum, and how the New York City District Attorney decided that a small bank would be a good target in that environment.
Abacus Federal Savings Bank was founded by Chinese immigrant Thomas Sung because he saw that the Chinese community was not being well served by the other banks. As he put it, they wanted Chinese deposits, but didn’t want to loan them money. Through the years the bank has carved out its niche market in Chinatown, where Sung is in many ways a community leader. The bank has since passed on to his daughters’ control. When a loan originator was discovered taking bribes and falsifying records, he was immediately fired and federal authorities were notified. When the DA’s office began investigating, the bank enthusiastically cooperated and hoped that if others were not following the rules they would be found out. But soon, it became clear that the prosecutors thought the whole bank was corrupt and indicted a large number of employees and the bank itself.
The Sung family sees themselves as an honorable part of the community. Indeed, in the cash economy that many in the immigrant community operate in, a bank such as Abacus is the only kind of bank they will trust. This is a small, family-owned bank with just six branches. This bank is the 2531st largest bank in the US, with 1/100 of one percent of Bank of America’s assets. Many small banks would have pled guilty and paid a fine. The Sungs would not. Thus began a five year legal battle that cost them $10,000,000. The film follows the Sungs throughout the trial that lasted about three months.
The film is made from the point of view of the Sung family, but includes many voices of differing views, including Cyrus Vance, Jr., The New York District Attorney and the prosecutor for the trial, two jurors with differing views, the bank’s attorneys for the trial, journalists, and others. Even though we clearly want to side with the Sungs, enough of the prosecution’s argument is given so we can grasp the case against them.
The film opens with a clip from It’s a Wonderful Life. This is a film that Thomas Sung views as his own philosophy of banking and community. He had already established a successful career as a lawyer before starting the bank. But he believed it was his responsibility to give something to his community. He has always seen the bank in that light. As we watch, we get a small glimpse into the Chinese immigrant community (a group that can be very insular). The film offers us a chance to consider what it means to be a community. And we also see what role a bank can play within a community. We may even ask what our own bank may do to be part of the community. (Let’s face it, they all will brag about some community projects, but are the big banks that many of us use really involved?)
Because this also is in part a courtroom drama, it offers us a chance to think about justice. There is no doubt that illegal acts happened at Abacus. The Sungs not only admit that, they point out that they turned their own bank in when it was discovered. But it is fair to ask to what extent justice is served in this costly prosecution, or whether there were some self-serving aspects in the public announcement of the indictment and the perp walk that the DA’s office staged. It also raises a question of if there is a racial component to this prosecution. Would a bank that was not centered around one ethnicity (and one that may have little political clout) have been treated the same And what about the total absence of any prosecution of the larger banks that actively participated in wide-ranging fraud? (Abacus is the only bank to have been indicted from the 2008 banking crisis.) Is it acceptable to single out a small bank with few resources to defend itself and let bigger, stronger banks never face justice? Perhaps the criminal justice system is on trial here just as much as Abacus Federal Savings Bank.
This film will eventually make its way to TV on PBS Frontline.
Photos courtesy of PBS.