Rather, Abacus continued about its business. Unlike the banks that foreclosed or required bailout in connection with the crisis, Abacus never invested in mortgage-backed securities, nor did it ever originate any subprime mortgages. Vance chose the “right case,” but the “wrong bank,” according to Puvalowski. Amidst this environment, DA Vance wanted to send the message that in fact, there would be consequences for some corporations and individuals. The FCIC's chairman Phil Angelides cited the lack of action as sending a message to Wall Street that consequences for individuals would be minimal. Attorney for the Southern District of New York, Preet Bharara, has said the same thing on numerous occasions. Essentially, he says that it would have been too hard to prove charges against the big banks. DA Vance admits in the film that he considers much of what the big banks did leading up the financial crisis as “less than ethical,” but he did not seek any indictments against them. When the financial institutions came under fire after the market crash in 2007, too-big-to-fail institutions like Morgan Stanley, Goldman Sachs, JPMorgan, Chase, and Citicorp had issued $4.8 trillion in fraudulent mortgages and had received a $700 billion government bailout, paid a total of $110 billion in fines, and were given deferred prosecution and non-prosecution agreements. While Abacus may not have been able to establish selective enforcement or malicious prosecution in a courtroom because of the way the doctrines are stacked, the Abacus Bank trial still serves as a potential lesson for future prosecutors to understand and use as guidance in their decision making. It is important that the consequences of the litigation brought against Abacus Bank are remembered and studied, so as to hold prosecutors such as Vance accountable for the ways in which they exercise prosecutorial discretion, and to encourage prosecutors to remain aware of cultural context and implicit biases when targeting businesses that cater to underserved minority communities. Vance has been met with harsh criticism that he pushed the boundaries in his aggressive pursuit of a “lowest hanging fruit” family-run bank that fills a necessary void by catering to the Chinese American minority community. To date, Abacus Bank remains the only financial institution criminally prosecuted in connection with the 2008 financial crisis. Ultimately, after a five year investigation by the DA and four-month long jury trial, Abacus Bank was found not guilty on all charges. Prosecutors alleged that Abacus and nineteen of its employees had systematically defrauded the Federal National Mortgage Association (Fannie Mae) by allowing borrowers to lie about their income and assets on the government-sponsored mortgage company's proof-of-employment forms. The media was treated to a spectacle as the indicted Chinese-American Abacus employees were handcuffed, chained together, and marched by law enforcement down the narrow hallway of the New York City courthouse in front of cameras. Nevertheless, on May 31, 2012, the New York County District Attorney's Office (DA) announced criminal charges against Abacus Bank in a 184-count indictment. Abacus avoided the fallout of the crash because it never invested in mortgage-backed securities, nor did it ever originate any subprime mortgages. Abacus Bank also was not an institution that required financial assistance from the government in the wake of the burst of the housing bubble. Abacus Federal Savings Bank (Abacus Bank or Abacus), a family-run community bank based in NYC's Chinatown catering primarily to Chinese immigrants, was not amongst these failed institutions. The financial crisis resulted in 489 bank failures from 2008 through 2013. When the housing bubble burst, hundreds of billions of dollars in losses in mortgages and mortgage-related securities shook markets as well as financial institutions around the world. In the fall of 2008, interest rates, easy and available credit, scant regulation, and toxic mortgages culminated in the collapse of the housing bubble and ultimately, full-blown financial crisis. Excerpted From: Chloe Chung, Asian American-owned Banks Do Count: No Wrongful Jailing of Abacus Bank, 25 Asian Pacific American Law Journal 79 (2021) (452 Footnotes) (Full Document)
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