FRONTLINE

S2017 E15 | FULL EPISODE

Abacus: Small Enough to Jail

From acclaimed director Steve James (“Hoop Dreams,” “The Interrupters”), the little-known story of the only U.S. bank prosecuted in relation to the 2008 financial crisis.

AIRED: September 12, 2017 | 1:24:47
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TRANSCRIPT

>> NARRATOR: Tonight...

>> These defendants are charged with engaging

in a systematic scheme

to falsify and fabricate loan applications.

>> NARRATOR: The little-known story about the only bank

prosecuted for mortgage fraud after the financial meltdown.

>> At first you think that they're here to figure out

what's going on for us.

We transitioned to, "Wait a minute, maybe we're the target."

>> NARRATOR: A family business caught up

in a national crisis...

>> I think Americans were upset that the security

against which loans were made were often fictitious,

and at Abacus, there was some truth to that, too.

>> NARRATOR: ...And fighting to survive.

>> Tom is not easy to be pushed around.

And my girls, they're tough, smart, capable women.

>> It's trying for us because it's our father's legacy,

and he's passed that legacy on to us.

>> NARRATOR: Tonight on "Frontline"from Steve James,

the director of "Hoop Dreams" and "The Interrupters,"

"Abacus: Small Enough to Jail."

>> I owe everything to George Bailey.

Help him, dear Father.

>> First time I saw "It's a Wonderful Life,"

I had tremendous respect for George Bailey,

who is the main character.

He did so much good for the community.

>> Mr. and Mrs. Martini, welcome home!

>> George was lending money to the community residents

to buy houses.

>> Me, Giuseppe Martini!

I own my own house!

>> And that's exactly the same purpose

that when we started the bank, it was our motivation

to help a lot of people, a lot of immigrants.

>> Here you are, George!

Merry Christmas!

>> This movie touches me so much: the family, the friends.

I always watch it.

Every year, I watch.

>> (singing "Auld Lang Syne")

>> That makes me cry.

That's the part.

>> I wish this story could end the same way

asIt's a Wonderful Life.

But in reality, it is not that simple.

>> Today, we are announcing the indictment of 19 individuals

on charges including mortgage fraud, securities fraud,

and conspiracy.

As well as the indictment

of Abacus Federal Savings Bank,

a federally chartered bank that has been catering

to the Chinese immigrant community since 1984.

If we have learned anything from the recent mortgage crisis,

it's that at some point, these schemes unravel

and taxpayers can be left holding the bag.

>> The D.A. made such a big parade,

bringing people from Washington,

all these tough law enforcement officers,

and making such a big announcement

that we are part of the cause of the financial crisis of 2008.

Almost laughable.

>> Mr. Sung is entitled to his opinions,

but in Abacus's loan department,

mortgages were based upon false documentation.

We have evidence of conspiracy, larceny, and systemic fraud.

>> (reporter speaking Chinese)

>> If that prosecution goes through,

that bank is going to go out of business,

there's no question about it.

They're going to lose their charter

and it's going to enormously impact that community.

Too big to fail, you know, turns into small enough to jail,

and Abacus is small enough to jail.

(music ends)

(people chattering)

>> When I walk around here,

of course I feel very much at home.

Incidentally, this is a very tasty noodle shop,

if you go in there.

I was born in Shanghai in the year 1935.

At the age of 16, I immigrated to the United States

and went to law school, and I moved to Chinatown.

There was not many Chinese lawyers,

so I did a lot of pro bono work.

This building with the Chinese national flag,

this is the Chinese Community Center,

and in there is...

I represented the association for years and years and years.

This association sponsored a school,

and I obtained the charter from the Department of Education.

>> (singing in Chinese)

>> And people in the community, older people, particularly,

remember me, know what I've done.

>> Very good.

>> Back when I was a lawyer, there was no bank that was owned

by Chinese and serving the Chinese.

>> This is Chinatown, New York City-- warm, colorful, cheerful.

A wonderful place for sightseeing.

This man is on his way to the bank.

What is it about the bank that makes our man feel at home?

The very design: beautifully bright,

with the primary Chinese colors.

And he sees home in the soft, sweet smile of the teller.

>> At that time, banks in this community

had several hundred millions of dollars of Chinese deposits.

And I went to the bank to try to borrow money,

but they do not lend money and deal with the community.

>> He always told us stories that they were willing to take

his deposits, but they weren't willing to give him credit,

loans.

So that's why he started the bank, because he felt

that wasn't fair to the community.

>> I remember when we were children, my dad was excited

about this venture that he was going to start.

And he involved us in the decisions of what would be

the symbol for the bank,

and I remember we would all try to design something.

>> Abacus, you know, is the Chinese calculator.

China regard abacus as a national treasure, so we say,

"We'll name the bank Abacus."

Hello, can you open for me?

>> We serve people who've never even dealt with a banking system

before, and you try to bring them into the banking system.

An example of that is the safe deposit boxes.

>> Have you ever seen so many boxes?

There are 8,000-plus boxes in this vault.

8,000.

The Chinese people, particularly the immigrants,

they rent houses in a very tight quarters.

There's no place for them to place their valuables

except in a bank vault.

>> So it starts with the safe deposit boxes,

then they're willing to put their money into the bank

and then let the money grow, and then later on,

they will take that money and use it to buy a home.

>> At the actual closing, many of the borrowers bring

their whole family with them.

They bring their children, their

grandmother, and by the time

they walk out, they're all

super-happy, and you feel good

to be a part of that process.

>> (family chatting)

>> Do you have the chicken feet in there?

>> Yes.

>> Oh, okay.

That's always special.

>> There's chicken butt.

>> That's the butt.

You don't want to eat that.

>> I like it.

>> (laughs)

>> I never thought my girls would work in Chinatown,

because we lived in Greenwich, Connecticut.

Tom would be commuting every day, you know,

like an hour and a half each way.

So he didn't see them that much in those days.

They had no idea, anything, not the faintest idea about

the Chinese community.

In fact, Heather still doesn't.

She hates the city, you know, she's like me,

we both have headaches.

And at home, when we don't want them to understand,

we speak Chinese.

>> You always said to me, "If you come work for the bank,

the benefit will be, you have a 9:00 to 4:00 job."

>> 9:00 to 4:00, he said that?

>> Yeah, because a long time ago,

people could leave at 3:00 from the bank.

He said, "You can have children, you could have a family."

>> You know what he said to me?

He said, "If you wish to work with me, remember,

this is your own choice, and don't think

it's going to be easy."

You gave two different stories.

>> You know, people asked me,

"So why in the world you wanted to get into banking? "

It's not because I needed a job.

I was practicing law, I was busy, but I said to myself,

"It's time for me to do something for the society."

That started from Ye-Ye's time.

>> Grandfather.

My grandfather, your father.

>> He always thought that was

the honorable thing to do.

>> That's not unusual.

A lot of people in Chinatown, your generation,

they believe that was honorable, to be entrusted.

>> To be trusted.

>> Entrusted with the public funds.

>> Yeah, that's right.

>> Do you have a copy of the pay-off letter?

This whole five-year ordeal began in December of 2009.

I had a closing that day involving

one of our loan officers, Ken Yu.

>> Ken Yu worked with us around four years.

The staff really liked him, he was very popular,

he had some charisma.

>> It was a normal closing.

There was the seller's attorney and there was the buyer.

But there was a lot of tension in the closing.

They weren't getting along, they were arguing over things.

>> The attorney asked me a question

about additional monies that the borrower said

that she was paying.

It didn't make sense to me, so I called Ken Yu and I asked him,

"What are these checks?"

He just got, "Oh, blah, blah, blah, blah,"

hedging and not answering.

>> Vera was very upset.

This girl gave thousands of dollars, I'm told,

to this loan officer, and she thought they would be applied

towards her closing costs and they weren't.

>> It was very shocking.

I said, "This loan cannot close."

That was Friday.

Then on Monday, Ken came in and I fired him that day

because he was lying all over the place.

Ken Yu stole money and he was running

a money-laundering operation on his own

unbeknownst to everybody here, obviously committed fraud.

I referred the case to our compliance officer,

and then we hired an outside consultant,

a former federal prosecutor, who was highly experienced in fraud

and anti-money-laundering investigations.

During our investigation, we found two other loan officers

who were engaged in wrongdoing, nothing at the level of Ken Yu,

but we fired them nonetheless.

Then some other staff also resigned.

Shortly after, we notified Fannie Mae.

>> They actually not only fired the loan officer

and canceled the closing, they went straight

to the Office of Thrift Management,

which was their regulator, and they told them about it.

So it was this perfect evidence of a bank finding out something

that shouldn't be happening and taking steps to make sure

this didn't happen again.

>> The couple, unfortunately, lost the down payment

on this house, which was quite a chunk of money.

It was ten percent of the house's price,

and they were very upset.

>> And at that point, the borrower,

she calls me and she's like,

"You know, there's this money that he's taken from me,

so what are you going to do?"

And I said to her...

I remember I was furious, I'm like, "What am I going to do?"

Because I'm thinking to myself,

"Maybe she's in cahoots with Ken Yu to defraud the bank."

I said, "If you have a problem, you should go file a complaint

at the police precinct."

>> A complaint was filed with the local precinct.

The initial D.A.'s office investigation was focused

solely on the employee who'd been accused of a theft.

>> The D.A.'s office started asking us questions.

Everybody who asked us for something, we gave them.

We thought we actually went beyond

what we were supposed to do.

My compliance officer actually put together binders

for her staff, and so basically, the beginning of the case

was handed to her team in binder form.

>> You know, at first you think that they're here to figure out

what's going on for us because they're law enforcement.

I don't know where, and at what point, we transitioned to...

>> In their mind, yeah.

>> In their mind, and then us realizing,

"Wait a minute, you know, maybe we're the target."

>> We spent a lot of time investigating

and ended up absolutely convinced

that the loan department was corrupt

pretty much through and through.

Mr. Wong ran the loan department,

and widespread fraud was occurring in front of him

every day.

(Yiu Wah Wong speaking English):

>> The office was convinced that the knowledge of that corruption

went up to high enough people in the bank

that the bank was legally responsible for it.

>> Let me assure you that we do not take lightly the charges

that we announce today.

Now, these defendants, the bank and former employees

and managers from its loan department,

are charged with engaging in a systematic scheme to falsify

and fabricate loan applications

to the Federal National Mortgage Association,

commonly known as Fannie Mae.

>> When the actual indictment occurred,

I think the greatest fear

was that it would directly involve Jill.

And that was something that was incomprehensible to us,

just knowing how we were raised, that she could ever be guilty

of something like that.

>> I mean, I think they definitely were looking,

trying to get us, to get me, yeah,

because I'm the C.E.O. and president,

but they did not charge me individually

because they did not have any evidence to support

that I was involved in the wrongdoing.

>> We felt that the provable evidence stopped

at a certain level, but that the individuals

who were charged were high enough in the corporation

to charge the corporation.

>> I was at the district attorney's office

as a prosecutor for seven years--

the very division that was bringing this prosecution

against the family bank.

And when I found out what they were doing,

I had to go to my bureau chief to let him know

that, you know, this was going on, there's a potential conflict

here, and it made me so angry that that very same office

where I had served and been trained could do that.

To know that they were doing this against my family,

who is me-- that's where I come from--

and then to know that my reputation in the office

was one of utmost integrity, it just...

...made no sense.

(woman speaking Chinese):

(man speaking Chinese):

>> What was especially interesting was the way

the D.A. pursued the public relations aspect

of this prosecution.

Reporters in this town were treated to this extraordinary

photo opportunity, this almost Stalinist-looking chain gang.

>> I'm a former prosecutor.

I'm not soft on crime.

I've never seen a spectacle like this.

These people were humiliated intentionally

for no good reason.

>> It is not the district attorney's office's decision

whether or not to put people in handcuffs,

but people who are brought into court,

who have been charged with crimes,

are put into handcuffs.

That's a decision that's made by the court officers.

I won't go into it more than that because, you know,

it's not something I'm involved with.

>> Court officers don't come outside of the courtroom.

They were led down the hallway

by district attorney investigators.

I got off the elevator and I saw what was happening.

I had never seen that in my entire time

at the D.A.'s office.

I mean, this was like the case of the century.

>> You never would have done that

with a black group of employees, you know?

I mean, everyone would see that for what it was.

And they actually staged it so much so

that three of the people that were in that chain

had already been arraigned, had already posted bond,

and were out awaiting trial.

>> The D.A. had added charges to Mr. Wong's indictment.

Usually, you don't even have to go through the process again.

They just add the charges, you get arraigned again,

the bail is transferred, and that's that.

Instead, they had me turn him in and the next thing you know,

I see him chained to 15 other people being herded like cattle

down the hallways of 100 Centre Street.

I've been doing this for 25 years

and I'd never seen that happen before.

>> There are security issues behind the decision,

but those decisions create feelings that are...

that don't reflect the view of the office or my view,

and to the degree that happened here,

I think it was very unfortunate, but it... it happened.

(Wong speaking English):

It is a humiliation for me, you see.

>> And that's where I saw incompetence

combined with arrogance.

My deputy bureau chief, he was always so inspirational,

and he would always refer to the inscriptions

outside 100 Centre Street about having faith in justice.

But I don't believe that anymore.

I decided to leave the D.A.'s office.

>> It really angered the Chinese community, but so what?

They're not going to decide an election for Vance.

(music playing)

>> That's it. (laughs)

>> You've done that many times?

>> My whole life.

This is the association where my great-grandfather was,

my grandfather, my dad.

Back in the day, with the Exclusion Act,

people did not have rights.

This was where they would all come.

Like Mr. Sung, what drives me is the sense of community.

(conversing in Chinese):

>> This case is about an attack on our community.

We're easy prey, I think that's what's going on.

People have reason to be fearful of authority,

of what could happen to them.

You know, the retribution, the years of oppression

that happened from the street vendors,

from the small businesses,

from people just writing tickets because they can.

>> It's more than just Abacus Savings Bank being clear;

it's about exonerating our entire community

no matter what we do,

be it the little guy selling vegetables

or a bank that's doing business.

I told Mr. Sung, "I'm glad they pick on you,

because you're a fighter."

>> Cyrus Vance just felt this is easier to attack,

especially as a family bank.

But he doesn't realize Tom is not easy to be pushed around.

And my girls, they're tough, smart, capable women.

So courageous.

>> Although this is David versus Goliath,

David, being Abacus Federal Savings Bank, has a slingshot,

and that is, you know, they're a whole family of lawyers.

>> I was going to be able to fight this.

>> They were almost gleeful.

They were, like, "We're going to have our day in court now.

We're actually going to be able to show that they were wrong."

>> They made a decision that they were not going

to plead guilty to something that they didn't feel

the bank was guilty of.

That is a courageous choice, and it's an expensive choice.

The D.A.'s office has hundreds of lawyers and took five years

to do their grand jury investigations,

and it is a daunting task to fight the government.

>> Good morning, ladies and gentlemen of the jury.

This is a simple case about a bank that was converted

into a criminal conspiracy fueled by greed.

Defendant Abacus Federal Savings Bank engaged

in an ongoing mortgage fraud conspiracy.

They routinely falsified and faked mortgage documents,

and then deceived the Federal National Mortgage Association,

commonly known as Fannie Mae.

They took Fannie Mae's money for loans riddled with lies,

all the while promising that the loans contained truthful

and verified information.

The defendants did this over and over and over again,

and between 2005 and 2010, the bank earned millions of dollars

servicing and selling fraudulent loans to Fannie Mae.

The defendants conspired to steal money from Fannie Mae

and did in fact steal money from Fannie Mae.

>> Historians tell us that Abraham Lincoln loved riddles,

and one of his favorites went like this:

"If you call a tail a leg, how many legs does a dog have?"

And the answer is four, because calling a tail a leg

doesn't make it a leg.

Calling Fannie Mae a victim of grand larceny and fraud

is like calling a dog's tail a leg.

We have no loss.

We have no harm.

We have no larceny.

We have no fraud.

(phone ringing)

>> Hello? >> Heather?

You're on speaker.

>> Okay. So how did everything go today?

>> It was a very long day.

>> We're exhausted.

I'm so tired.

>> Don't get me wrong,

I think the lawyer all did a very, very good job.

But the feeling, the emotion was a little bit lacking.

>> He did not touch the emotion.

>> A good, strong presentation of your case requires emotion.

>> Of course there were so many other things that could have

been said or should have been said.

>> I know.

>> You got to let your attorney at this point,

who's been living with this case and feels very strongly

about it, you got to let him, leave him be.

Let him do it.

>> He spent the most time talking about how we stopped

that closing, and he showed you what steps we took after that.

The jury has to be convinced by document evidence.

>> I agree with you.

The facts are brought out, the laws are brought out.

(talking over each other)

>> Let him finish it, you keep on interrupting him.

Let him express his feelings, he has to.

>> We let him express his feelings.

>> Yeah, but then you...

>> We're allowed to express our feeling, too.

>> Yeah, but you don't have to be jumping around.

You're talking back to me again.

>> I got to do work.

I have to sign off on loans.

That loan has been sitting on my desk for three days now.

>> You know what?

Don't get so excited.

>> I'm not, I'm just saying I got to get things done.

>> Okay, let's go, let's go.

>> Heather, I'm hanging up on you now, okay?

Rocket, let's go.

>> Okay, Jill, we'll leave you be.

>> Get out, get out, get out.

>> We have to work now.

>> Let's go!

>> So there were 180 or so counts in this trial.

And let's also remember that there were, I think,

ten guilty pleas here.

>> The D.A., his case was built basically on the fact

that he arrested all these very low-level loan officers.

>> They started going to people's houses,

many people at 6:00 in the morning,

knocking on their door and demanding,

not forcing, but demanding that people come down

to the district attorney's office and speak to them,

and they got a lot of statements from a lot of people

using that tactic.

>> We're talking about Chinese people,

many of whom have come from a police state,

and in China people are terrified of that,

the knock on the door.

>> Good morning, Mr. Yu.

>> Good morning.

>> When the court officer swore you in, he asked you your name.

You said Qi Bin Yu.

Is there another name that you go by?

>> Ken Yu.

>> Here's this gentleman,

Ken Yu, who was how the bank found out

about this misconduct in the first place.

The guy that the bank fired.

Not only was he falsifying documents

in order to put through loans,

he was stealing money from customers.

That guy ends up being the D.A.'s office star witness.

>> Mr. Yu, I'd like to direct your attention

to the Ariel Chi case.

Ms. Chi was the borrower that you stole money from, right?

>> Yes, sir.

>> Isn't it true that you asked Ms. Chi for a cash tip as well?

>> No, I never asked her for a cash tip.

I don't remember that part.

>> Mr. Yu, you had a telephone conversation with Ariel Chi,

is that correct?

>> Correct, sir.

>> And at the time, you didn't know

that Ms. Chi was actually tape recording that conversation

with the assistance of the district attorney's office,

correct?

>> Yes, sir.

>> The D.A.'s office was trying to get him

to implicate the bank.

This recording was brought into trial through our attorneys

on cross-examination of Ken Yu.

>> Let's just get right into it.

>> You told me, after closing, that I'm supposed to go

and give you cash, right?

>> Right, to make things...

I mean, it's, legally, you're not supposed to do that, but,

hey, it's after the closing...

>> Yeah, I mean, everything else is legally not right, so,

you know, I think...

>> (laughs)

It's just an unwritten rule that, uh...

It happens every, like, every case that I see, you know?

It ends, and you're, like, you show some appreciation...

>> Does this refresh your recollection

that you did ask her for a tip?

>> Yeah.

>> I noticed that he couldn't look at me.

>> That's very telling.

>> Yeah, he couldn't look at me,

but I was, like, "I'm going to look at you.

I'll burn you with my eyes."

>> I was looking at him intently, as well, too.

"I dare you to say what you want to say."

>> He got on the stand and perjured himself over and over

and over again in ways that a defense lawyer just doesn't get

in a career more than once or twice.

The jury laughed at him multiple times.

>> Abacus-- you told me that Abacus knew, right?

>> We don't say it to the bank.

It's just individuals, the people who work for the bank.

I'm an employee of the bank, and so is the other underwriter.

>> So then, okay, but, like... Abacus, like, the bank,

they know that everybody's thing is made up, right?

>> I will, I will say that.

>> Now, you had a long pause there, didn't you, Mr. Yu?

>> I was driving.

>> So that long pause is because you were driving?

You were distracted?

That's your testimony?

>> I cannot recall, but I was definitely driving.

>> You'll say that if you get in trouble,

is that what you meant there?

>> I say that because...

>> That's a very...

Mr. Yu, I'm asking you.

It's a strange way to answer that question,

and I'm asking you what you meant by...

>> I will, I will say that.

I will say that.

I believe that.

>> Well, the jury can decide what your tone suggests.

>> It became quite clear that he had no trouble lying.

If that's how he's comfortable acting,

I would have thought that he would be comfortable

saying much more to try to directly link Mr. Tam

and Mr. Wong and Jill Sung with what had happened,

but even he didn't do that.

>> But you also had to not let go of the fact

that he didn't get this way overnight.

He had years of this type of behavior

that was just overlooked on numerous occasions.

>> What role did the bank's management play

in what had happened-- how much they actually were not aware

of what was happening-- versus turning a blind eye

because things were going well and the results were good.

>> Ken Yu was clearly a bad egg.

By using Ken Yu, which is the worst of the worst,

the D.A.'s office is saying,

"This is the face of the institution."

Because if the bank was in such cahoots with this person,

then why would we fire him?

We would want to save him.

>> What the D.A. accused Abacus Bank of was ridiculous,

and really nothing considering what

the big banks were doing.

All the too-big-to-fail banks-- Morgan Stanley, Goldman Sachs,

JP Morgan Chase, and Citicorp-- have admitted to massive crimes,

and they've been accused of even worse.

>> Virtually every major financial company and big bank

in this country, and many of the foreign banks, as well,

were engaged in a far-reaching fraud scheme

whereby they were issuing huge numbers of home loans.

Particularly to middle- and low-income borrowers.

And then they were repackaging those loans and selling them

to investors, but disguising them as high-rated securities.

Those were extremely dangerous, toxic loans

that were likely to blow up

and did blow up in huge numbers after 2008.

>> But there was this notion that we couldn't bring

criminal action against them

because the collateral consequences of an institution

that was so large, so internationally connected,

that indicting them or bringing criminal charges against them

could wreck the entire financial system.

>> So you have these enormous offenders,

and they commit crimes, we'll just take money.

They'll cut a check and make it all go away.

>> I think every American was upset at the crisis

that we went through.

There was behavior that was less than ethical.

And I think Americans were upset that the security

against which loans were made were often fictitious.

And at Abacus, there was some truth to that, too.

It's clearly not a big, big bank.

And clearly, it was not representative

of the entire financial community, but I think

the principle was the same.

>> It shows, I think, very graphically this difference

in how we deal with a certain kind of offender

versus everybody else.

>> Mr. Sung was not offered the same deal.

He wasn't offered a chance to just pay a fine,

he wasn't offered a chance to plead guilty

to some minor thing, he wasn't offered the chance

even of deferred prosecution.

He didn't get any of that offered to him.

>> The D.A. told us, "You have to accept a plea of guilty

for felony plus a fine."

Now, what is our choice?

>> They wanted a conviction, and Vance was going to go after it.

>> I think if you were going to pick a bank to pick on,

a family-owned company wedged between a couple of noodle shops

in Chinatown is about as easy a target

as you could possibly pick.

>> I think the characterizations that this was somehow

a cultural bias on the office's part,

entirely misplaced and entirely wrong.

We devote an enormous amount of effort into protecting

immigrant communities,

and I felt that our handling of the bank was consistent

with how we would have handled the bank

if we were investigating a bank that serviced

the South American community or the Indian community.

There was nothing different that we did or purposefully designed

to treat this bank differently.

>> It was important for prosecution to show

how exactly loan managers knew what was happening.

I think the most compelling piece of evidence

they had was the seating chart of the Abacus loan department.

The loan officers who had been indicted were scattered around

the floor, and somewhere in the middle

was the loan office manager.

>> This was all happening around Mr. Tam's desk.

How would he not be aware of this type of behavior

when this was going on on a routine, daily basis?

>> It's not so simplistic as they would like you to believe,

as a simple drawing as to where someone sat.

>> But on top of that, they brought Ken Yu,

who was a consummate liar, and he speaks a different language

than Mr. Tam, he conducts business outside of the bank.

Actually, at one point, they cross-examined Ken

because Ken said, "Oh, the guy gave me cash.

I was counting from my table."

When the borrower came in to testify, the borrower said,

"No, I met him in the lobby of the bank."

>> We were able to show that the loan officers were taking steps

to hide their misconduct from the underwriters

and the more senior levels of the bank.

They would stop talking when an underwriter

would come to the floor.

They would forge signatures to make sure the signatures

would match up.

When the underwriter looked at the file,

everything would look normal.

>> You had loan originators that were going to make commissions

by getting these loans through.

And then you had people like Mr. Wong who had no incentive

whatsoever financially to do this.

So they did everything they could to hide their crimes

from Mr. Wong because they knew he wasn't involved

and that he would deny loans,

which he did many times.

He would deny people where the income couldn't be verified

or where it seemed like the income was out of line.

There was one denial he did where there were

fraudulent documents that he uncovered,

and his denial of loans cost the originators commission.

(Wong speaking Chinese):

>> I think the people who went to the bank

and got the loan didn't fully understand perhaps

that what they were doing was lying.

But I think that ultimately, the unintended losers here

were the borrowers and the community.

>> We're actually contributing to the revival of the community.

It is absolutely mind-boggling for him to say that.

>> When the indictment came down, Sung saw it as

an existential threat to his bank,

and rightly so, because so many institutions fail

just for having that indictment.

>> We already went through a crisis in 2003

that almost closed down the bank.

>> The FBI is looking for Carol Lim,

who ran the Canal Street branch of Abacus Federal Savings.

Word of the alleged scam set off panic waves

among bank customers.

>> So in 2003, I happened to be doing a story in Chinatown.

My photographer at the time said to me,

"There's something going on up the block."

>> Back it up, back it up!

>> Chaos in Chinatown as thousands of investors

make a run on Abacus Federal Savings Bank

demanding their money, after hearing that a former bank

manager was being investigated for embezzling

a million dollars.

When the rumors spread in the Asian community,

the run for the dough was on.

(speaking Chinese):

>> Take a walk, go elsewhere, do something else today.

>> In that short period of time, people withdrawed something like

$44 million, putting us in a liquidity crisis.

Associated Press report that we have not seen this type of run

since the '30s, since the Depression.

>> You have to understand something about Thomas Sung.

To me, he's like Jimmy Stewart out of "It's a Wonderful Life."

>> I'll be back in a minute, Mary.

>> He's the small-town banker, but the town is Chinatown.

>> I went to the police department,

asked them to give me a bullhorn.

I went on the line and I said to them, "I'm here."

>> You're thinking of this place all wrong,

as if I had the money back in a safe.

Why, your money's in Joe's house.

That's right next to yours.

And in the Kennedy house and Mrs. Maiklan's house

and a hundred others.

>> And I actually went out and shake hand with them.

"Feel my warm hand. I'm here.

I'm a real person."

After I did that, the run subsided.

>> Relative calm in Chinatown, in sharp contrast

to Tuesday's mad rush on the Abacus Federal Savings Bank,

the C.E.O. of the bank assuring investors.

>> They knew that everything was okay.

The people came back.

They came in, deposited money.

They thank us.

If I did not have that rapport with the people,

then I would have been much more worried

that the D.A. indicted the bank.

But if the verdict is guilty,

there is the possibility that Abacus would not survive.

>> I never supported him with the bank, I have to be honest.

I had told my husband, I said, "Banking is not good."

I felt it's a troubled business.

There are too many banks, you know, not everyone is successful

and not everyone will really appreciate what happens,

you know, if something's wrong with the bank.

>> When you have a false document,

it enhances the ability of Fannie Mae

to ask you to take back the loan.

>> I really felt my girls should go to do something else

that they like to do. I didn't want them to work at the bank.

But they went in, you know, because they want to help

their father.

They are fiercely loyal to Tom.

>> You agree that income and assets is a material fact

that has to be accurately represented...

So I had never, until now, found a motivation

really to come work for the bank.

And this year, when the trial started,

I was having nightmares myself.

I mean, Vera and I were sharing a room back

at my parents' house in Connecticut,

and we were both waking each other up,

and I realized, "I can't go on in my own career

right now anymore."

I was, like, "I have to help my family now."

I think the law says the document

presents a material fact.

>> If it is truly material...

Listen to me.

If it is truly material, the loan will go in default.

>> Differentiation may not...

>> I get really frustrated sometimes.

It's probably a factor of being the youngest,

but sometimes I just, like,

whatever I say is just not heard.

Papa, if that's the form...

If that's the form that you choose to use...

>> I'll tell you what is tongue-in-cheek:

she said, "No harm, no foul."

>> If that's the form... >> I never said that.

>> Hold on, I have a question, Papa.

If that's the form that you choose to use to represent...

>> She used that word.

>> If that is the form... >> That's not true.

I just told you there is harm.

Okay, nothing more for me to say.

>> This is my office-- sorry.

As you can see, my desk is now piled extremely high,

but I think it's always been a mess.

That's just my personality.

My father has always said,

"As an attorney, you should be neat and organized."

Maybe I'm just not cut out to be an attorney.

Tracy, on your desk, anything urgent

that I need to get done before the weekend?

We haven't been having many closings

because of the effect of the trial.

I've been waking up at 5:00 in the morning getting work done,

banging out all these emails and and then go to court.

>> Did you ever tell the person that you spoke to at Abacus Bank

that you were a manager at Becky's Nail Spa?

>> (speaking Chinese)

(translated): I was not a manager.

The person told me that my income was very low,

so it's better I have to be a manager,

otherwise I can't get the loan.

>> The prosecution over and over tried to suggest

that the borrowers were innocent, that it was

the loan officers who were inducing the borrowers

to falsify documents to qualify their loans.

>> On this loan file, why does it say you're a manager?

>> I don't know.

>> Did you tell anyone that you were a manager?

>> No.

>> But we were able to show with witness after witness

that it was not just the loan officers.

Borrowers were trying to fool the bank

in order to put through loans.

>> Mr. Lin, you had your employer sign the verification

of employment form for the loan file, is that correct?

>> Yes.

>> And he signed as the co-owner of the China Sun.

Did anybody co-own the restaurant with Mr. Pan?

>> I don't really know.

>> You don't know if Shu Qin Lin was also a co-owner

of the China Sun restaurant?

>> I only meet this person a few times.

I don't know if this person's a co-owner

of the restaurant or not.

>> Shu Qin Lin you only met a few times

and you don't know if she's a co-owner?

>> They didn't tell me.

I didn't ask.

>> Okay, Shu Qin Lin, spelled S-H-U Q-I-N L-I-N,

you don't know who that is?

>> I know who that is.

>> You do know who that is.

So who is that?

>> You can say she's like a sister.

>> Is she like a sister, or is she your sister?

>> She's my sister.

>> There was a string of witnesses

who were just abject liars.

To the point where it became a concern of ours

that the jury's going to think that everyone

that the bank deals with, former employees and customers,

are just full of (bleep).

>> So the trial's been going on for the ninth weeks now, right?

>> Is it nine?

>> Day 52.

>> You've been counting?

>> I've been keeping track of the number of days...

>> Is that from the time that the jury was picked?

>> Yes, since January 12.

>> I just cannot believe how this thing

could be dragged out so long.

The weeks in trial and the expenses involved,

the millions of dollars that's spent to defend yourself.

And witness after witness,

of course they would know if they are lying.

So you bring these people up day after day for nine weeks,

and what is the effect on the community?

People get the wrong impression

that Chinese are not law-abiding.

That's just too bad.

>> Well, we can hopefully win this case and make a statement.

>> Even if you win the case, the damage...

>> Well, to us.

>> ...and the stain on the community is done.

>> Chinese immigrants come from a culture in which

so many financial transactions are based on trust,

and trust that's not underwritten

by a piece of paper, on trust that's an intimate

understanding between members of a community

or between family members.

I don't think any of the borrowers think

that they are really committing a crime,

even if some of these loan documents are falsified.

>> One particular individual had been approved

for an $800,000 mortgage loan,

but on their tax return, they were earning only

$24,000 a year, and I think this was as a couple.

There were a lot of gasps across the jury panel.

How does this even happen?

>> Tax evasion, I think, lurks in the background of this case.

Because they work primarily in a cash economy,

a lot of the borrowers had money that they did not report

to the I.R.S.

Only when they're purchasing a house

did it become necessary for them to prove how much money

they had, but then they were trapped in this position

of not having the paper trail.

>> Maybe folks in that community don't pay, you know,

100% of their taxes.

These are issues that if they have a problem

with any immigrant community that operates in cash, okay,

they have the wherewithal to do something about that.

The I.R.S. does, too.

Abacus isn't the F.B.I.

There's no bank regulations that require the bank

to basically serve as a police force against its own customers.

>> There'd be chaos if your bank basically was the I.R.S.

No one would want to bank with any bank.

>> You can say that our responsibility was to provide

credit to the community, not to be a policeman.

>> And I remember Mr. Sung said this to me.

A guy comes to him to modernize his restaurant,

and he said, "I don't even need to ask him

his income because I eat at that restaurant

and I see how full it is.

So when he comes in and asks me for a loan,

I'm ready to give him the money."

That's the kind of thing a community bank can do,

and in the Chinese community, that's what they were doing.

They knew their community, they were making these loans.

>> The prosecution had insisted since the beginning

of the trial that many of the documents

that were part of the mortgage package were fraudulent,

and that included in many cases gift letters,

gift letters written by relatives or friends.

>> There was knowledge throughout the loan department

that what was being put forward as unencumbered gifts

were in fact loans.

And the source of those loans?

Money that came from who knows where.

>> In Chinese culture, the line between a gift

and a loan is very blurry,

to the extent where there isn't even really a distinction

when it's coming from your parents or your relatives.

>> This is what immigrants have always done.

Jewish families did it.

Irish families did it.

Italian families did it.

Chinese families do it.

>> If I receive, you know, $50,000 from my mother,

there isn't a paper document that says

I must return that sum.

But, you know, if I end up caring for her in her old age,

that's a form of payment.

And I remember sitting in the courtroom hearing

how perplexed they were when they were answering

this question.

You know, repeatedly, they were being badgered, you know,

"Is this a gift or is this a loan?

Can you clarify?"

They said, "Well, you know, if I can pay it back, I will,

but, you know, if I can't, we're a family."

>> So gift letters actually had to be from a relative or spouse.

But it came to surface that these loan officers

sometimes were listed as the gift donors.

>> Mr. Yu, at the top of this gift letter certification,

it reads that you are making a gift of $9,000

to your cousin Qi Zhen Chen.

Is Qi Zhen Chen your cousin?

>> No.

>> Did you make a gift of $9,000 to Qi Zhen Chen?

>> He gave me $9,000 in cash and we went downstairs

and got the certified bank check in his name.

>> Tell us how it came to be that Qi Zhen Chen gave you

$9,000 and then you gave him a check.

>> This particular customer did not have any credit scores.

>> Can you tell us from this document

who approved this loan?

>> That would be Ms. Vera Sung.

>> If Ken Yu is signing a gift letter "Ken Yu,"

that would be disturbing.

That's not what happened.

>> The Chinese name of Ken is not known.

But people just called him Ken.

Ken Yu clearly knew that and purposely put his Chinese name

on that check for that reason, to obfuscate that it was him

who had given, quote, gift to the borrower.

>> Mr. Yu, what is the commitment letter?

>> That the bank agrees to give this borrower a loan

if all the conditions were met.

>> Right.

And gift letters, for example,

have to be in the file before you close,

but not before the commitment letter goes out,

isn't that right?

>> You are right, sir.

>> So the verification of employment that you helped fake,

the gift letters that you helped fake,

were done after Vera Sung approved this loan

on behalf of the board of directors, isn't that right?

>> In this case, yes.

>> It's trying for us because it's our father's legacy.

>> Exactly.

>> And he's passed that legacy on to us.

And Vera, when she wants to be very mean to me,

she'll point out,

"It happened under your watch," right?

So she can be very mean to me.

(hair clippers buzzing)

(conversation in Chinese)

>> So much time has gone by.

Our father was 75, and now he's 80.

>> People don't understand there's some long-term effects

from going through such a traumatic experience.

>> "This bank will surely continue to seek vindication

not simply for the ultimate acquittal of the bank itself,

but for the larger Chinese immigrant community

that it has served for 31 years.

The raw display of power by the D.A. will always remind this

and other minority communities that our human rights

can easily be trampled upon."

It's a little bit counter- intuitive,

the way you write it.

You want to tell people that you cannot allow something bad

to go on.

>> That's what I told him.

>> And so you're saying human rights

can easily be trampled upon, and I don't read it...

I don't want people to think you're saying that it can be.

In other words, it should be a normative sentence.

It should not be trampled upon.

>> The cost has been great, but it's very different

per each member of the family because we all handle stress

in a very different way.

>> See, Chanterelle, this is all in here, but he changed my words

again, and then he didn't put it in properly in here.

(sighs)

>> It's a little bit dry.

>> Because that's the chicken.

No mayo, that's why, right?

But there's cheese.

>> My father, especially, is able to handle stress

in an incredible way.

>> If you don't like your sandwich... are you okay?

>> I'm fine.

>> But you said it's dry.

>> Mm-hmm.

>> As he's gotten older, I think he feels

that he's done what he's wanted to do.

He's a little more philosophical,

and to know that he's done the best

that he can do is good for him.

>> If it's too much chicken, you don't have to eat all of it.

>> Did they put the avocado?

>> He complained, he said it's dry.

>> Oh, they didn't put mayonnaise.

>> Yeah, but they put avocado, they put avocado.

But he says it's dry.

>> I asked if you wanted avocado.

>> He says, "It's dry, but I'm easy."

>> This is how he is.

He's very calm, and I'm very... I'm like a jumping bean.

I'm always running around, you know, that's how I am.

And it drives me nuts.

>> My mother, I think, probably feels things the strongest.

She's a very emotional person and I think defines herself

to a large degree by the perceptions that others have,

so it hurts her.

>> I felt I lost my face.

You know, Chinese always want to save their face.

I was embarrassed to even see my friends because nobody...

I really don't know too much about the banking

and how I'm going to explain everything.

All I can say is, "We did not do it."

I just couldn't stand people thinking of my children

that bad, you know?

The prosecutor is saying that Jill lied,

so that really bothered me.

I felt like screaming.

Of course, Vera always tell me, "Don't talk, don't move,"

so I had to sit there and just suppress myself, you know?

That's why I couldn't even eat lunch yesterday.

I had a stomachache.

>> Ms. Roma, is the Federal National Mortgage Association,

otherwise known as Fannie Mae, in the business to make money?

>> Fannie Mae is in the business of providing home ownership,

and as a result of that, Fannie Mae does make money, yes.

>> This whole case ultimately came down to Fannie Mae.

Fannie Mae was the alleged victim in the case.

>> The prosecution's premise was that the 30 loans

that were in the indictment that we had sold to Fannie Mae

were not good because the documentation themselves

were not what they were supposed to be.

>> The bank can do whatever it wants.

The bank could keep those loans, it could service those loans

and care not a whit about the documentation.

That was the bank's choice: keep them or sell them.

It chose to sell them.

In selling the loans to Fannie Mae,

they simply passed the risk off to unknowing purchasers.

>> Ms. Roma, Fannie Mae doesn't want to lose money, does it?

>> Absolutely not.

And it doesn't want our lenders to lose money, either.

>> And you are familiar with the default rate of Abacus loans

during the indictment period, correct?

>> Yes, I am.

>> During the five-year period of the alleged fraud,

Abacus sold a little over 3,000 mortgages to Fannie Mae.

The number of defaults of those 3,000 totaled nine.

Nine!

>> Would you say that that was a low default rate?

>> The default rate is low.

>> Would you say it's microscopically low?

>> Objection to the characterization!

>> Sustained as to the word "microscopic."

>> Abacus Federal Savings Bank

had one of the nation's lowest default rates.

Not the highest; one of the lowest.

>> But that's not what we're looking at.

We're looking at, you know, was there falsified information,

and was it sold?

And it was.

>> These loans had not lost any money.

They're performing.

It was clear financially who was benefiting was Fannie Mae

from that transaction.

People got their loans, they got their houses.

It was almost ridiculous!

It was almost literally ridiculous.

>> Larceny is about stealing.

To bring larceny charges against the bank when the supposed

victim actually made hundreds of millions of dollars, it just...

It's outrageous.

>> My view is, if I take $5 out of your wallet,

I've taken your money.

If I...

Ultimately, if I give that back to you, or if you don't,

at the very end, actually have any loss

because the money gets back to you, that's still,

in our view, a larceny.

>> If I sold Fannie Mae a loan for $5,

not only did they get their $5 back on time,

as what they thought they were going to get it,

they also got $3, $4, or $5 back in interest,

which makes it $10.

So tell me how that is considered larceny.

>> There are two types of mortgage fraud

that generally occur.

We call them fraud for profit and fraud for home.

There are a certain number of people who commit the crime

of mortgage fraud because they lie

on their application to get a loan for the home

that they want to live in.

Is it technically a crime?

Absolutely.

Is it a crime that is worth the resources

of state or federal government?

Absolutely not.

These are low default rates on these types of loans.

The losses are relatively minor.

The other types of fraud, fraud where there really was never

any intention to pay the mortgage,

it was just about reaping profit as quickly as possible,

or fraud that went into these complex securities

that were built when the knowledge that there was little

to no chance that these loans are going to get repaid,

that's where the resources need to go.

And throwing your hands up in the air and suggesting that,

"Well, gee, any time a crime is committed,

we put all of our resources in to prove it," is just not true.

I mean, today, walking over to my office, the light was red,

and I confess, I walked across the street against a red light.

I am absolutely guilty of jaywalking

and I could have gotten a ticket.

Did I get one? No.

It would have been a complete waste of the NYPD's resources

to issue me a ticket and divert them of the real crime

that's going on in the city.

And regulators and prosecutors have to act

with the necessary discretion of when to bring charges

and when not to bring charges.

>> Neil is certainly entitled to his opinion.

Uh, I...

...disagree with the characterization

that this was jaywalking because I think it was systemic

and over a long term, and ultimately the risk was passed

without notice to third parties.

>> There should probably be regulatory punishment

for that type of behavior, without a question.

But who are the taxpayers that got hurt?

Who are the investors that got hurt?

Who are the individuals that lost their homes?

Who are the people that got tricked into mortgages

they couldn't afford and got thrown out on the street?

Who lost their life savings?

What financial system collapsed?

What GDP took a hit because of the actions that Abacus did?

And as far as I can tell, none.

>> Frankly, if every bank had underwritten

as well as Abacus during the indictment period,

we wouldn't have had a financial crisis.

>> We really need to talk about one issue right now,

which is whether or not we should have Jill testify.

>> It's really difficult, like, we keep switching

back and forth.

As of yesterday, Rusty believed that she should testify.

Kevin took a different position.

He was a little bit more hesitant.

And Papa feels so far that Jill should testify.

>> Actually, Rusty and Papa have the same opinion.

>> Right, a jury might not feel much

towards a corporate institution.

If you put a personal face to it, such as Jill,

they'll begin to see and realize that the consequences

of a conviction are serious.

>> However, nothing has been truly said of Jill

to implicate her in anything.

>> Right, I feel like I have yet to hear a reason to put Jill on.

In fact, if you don't put her on, it's not because

you're trying to hide anything, but because...

>> There's nothing to defend.

>> Excuse me, excuse me.

Do I have a voice, or what?

>> Yes, the mother is speaking.

>> That's a very good question.

She's not here right now.

>> She didn't even want to have this conversation.

>> The feeling that we got from her was that if she needs

to testify, she will, but she would feel terrible if she,

somehow she didn't testify well

and that would result in a negative outcome.

>> Yeah, she would blame herself.

I just wanted to, Papa, because I know you feel strongly

about Jill testifying, and I had felt

the same way, but one...

>> Okay.

>> Okay.

Have changed your mind.

>> So how would we feel if Jill

didn't take the stand and we did not win the case?

Would we have regrets?

>> I can't answer that. I can't answer that.

I have given the matter a careful and thorough analysis.

If the outcome is not for me,

I do not and should not feel regretful.

>> They have said that these kinds of documents

are so obviously false, that Mr. Tam and Mr. Wong

and the bank's other underwriters should have

caught that, and the fact that they didn't catch them

suggested that they were

involved in the fraud.

That's what they're telling you, ladies and gentlemen.

But here's the problem: Fannie Mae,

the best underwriters in the country, all they do,

all day every day, is look at loan files

from all over the country.

They are the gold standard, and they didn't see anything wrong

with these documents.

So if the best there is doesn't see anything wrong,

how can that be criminal?

It's not.

And here I'm going to show you again Fannie Mae's email

from 2012.

"We recognize that you have very unique needs

that are closely linked to the borrowers you serve.

While doing anything customized in this environment

is very difficult, the team is committed

to doing whatever we can to develop solutions

that meet the needs of your culturally unique clientele."

Ladies and gentlemen, Fannie Mae itself is conceding here

that this is Chinatown.

It's a thousand small businesses, first-generation,

special needs, and the bank serves that community.

Does that pose challenges to the bank?

Absolutely.

It would be a lot easier to deal with a bunch

of investment bankers who have W-2s and tax returns

all the time.

That would be easier.

But the bank has chosen to serve this community,

challenges and all.

>> Abacus's own narrative that they are trying to give you

is that they are trying to assist hard-working,

first-generation immigrants live the American dream

as a community service.

That's admirable, and it's great,

and Abacus Federal Savings Bank is free to do that

and then hold the risk on their own books.

What they are not free to do is take risks

with other people's money and not tell them.

They cannot take those risks and pass it off to somebody else

without telling the truth.

>> Four bowls.

>> Thank you!

>> No, five... six bowls.

>> And then she tried to say that these loans

seemed to be representative of our entire loan portfolio,

which is not true.

>> She literally rolled her eyes at your mission

and building this bank for this community,

to serve the community and help these people

with the American dream-- she just cast it aside.

>> Isn't it fortunate, at my age,

I can hardly hear everything that's said in the court?

>> That's a blessing.

>> Did you observe in the beginning

that the honorable Cy Vance himself

attended the beginning part?

>> I did not see it.

>> I have seen him on TV, and he's much smaller in person.

>> As a family, we've always been very close,

but we've unified even more during this time,

which is great.

>> Why are you laughing?

>> She was just in tears and now she's bursting out laughing.

>> You know, the judge sounds like the Godfather.

>> No, he said he has to save his voice for the jury charge,

because that's going to be a few hours, probably.

>> Are you not eating any rice?

Are you on a diet?

>> No.

>> (laughing)

>> Jurors, your responsibility in this case

is extremely important.

However, it is limited to this case.

You have not been asked to make some general assessment

of corporate governance in America

or whether banks are good or not.

You're not here to send a message to anyone.

You're here to determine whether the people have proven

beyond a reasonable doubt that the defendants here on trial

are guilty of one or more of the crimes charged in this case.

>> If they were going to vindicate all of us,

we would hope that it'd happen quickly,

you know what I mean?

"Oh, we heard this evidence, it's not worth it.

Just vindicate everybody."

>> This is a really nerve-racking time,

not knowing what the jury's going to decide and wondering

how come they didn't come back already.

>> At this point now, I think it's really bothering me.

It's, like, why can't they see what seemed so apparent

in the trial?

>> I hate waiting in court.

It's boring and annoying.

I'd rather be doing work.

But our lawyers want us to be here in court.

In case the jury have a question,

they want the jury to see we're still here

and we can help pick out the documents.

So I'll have to bring a lot of work, a picnic basket of work.

>> Day after day, the jury did not come back, and in fact,

the jury was asking for various documents-- some, you know,

unfavorable for the prosecution,

some unfavorable for the defense.

>> The first note came back and they said they wanted the list

of the loans that the D.A.'s office was claiming were bad.

And then they wanted all the loan files for those loans.

And then they wanted all the denial files.

>> It got to the point when we were actually trying to analyze

the handwriting on the notes.

>> We all know we didn't do anything.

That's...

>> It's impossible that we're found guilty on all counts.

It's just impossible.

>> We're driving ourselves mad trying to speculate,

"Oh, this person must be thinking this,"

and maybe they're thinking quite the opposite.

>> There was three different occasions

where we were a hung jury.

Everyone felt very strongly in their view on it

and had good, substantial enough evidence to why.

Where we had the toughest time

was the falsified business records,

because there was too many hands that...

it was touched throughout the bank

for the loan approval process for things to go unnoticed.

>> There was one specific juror, not Jessica,

who felt that we as a jury had a sort of broader responsibility

given the context of the financial crisis in 2008

to make an example out of this bank.

That we were somehow doing a disservice to the public,

to maybe the criminal justice system,

by allowing them to walk free.

>> We sent a note on June 3 to the judge

that we were hopelessly deadlocked.

Eight were on the not-guilty side, four was on the guilty,

and I was one of the four on the guilty.

>> Hi, okay.

So they were dismissed for the day,

and they came back with a note, again,

saying that they are deadlocked, and that both sides are adamant.

So the judge gave them what they call an Allen charge,

which basically said, "Go back and try to do this."

So that means that by the end of tomorrow,

either there'll be a verdict or there'll be a mistrial.

>> Tomorrow will be the last day,

whether or not there's a unanimous verdict.

>> Unless Cy Vance in his infinite wisdom

decides to retry the case.

>> Jill, were you going to call Mom?

>> I'm concerned about Papa's well-being.

He's 80 years old and he's been up since 5:30 a.m.

and he has nothing to eat for dinner.

>> We need to get you home, so let's get you some food.

>> No, no. >> Papa, you do.

>> Tom, Tom, Tom. >> Can you hear Mom?

So we're going to put him on a train.

He will go home now, Mommy.

You got to go home, Papa, Mommy's worried.

(talking on phone):

>> Okay, we'll eat.

>> You'd better eat now!

Killing you.

>> After such a long trial and so many charges against them,

it's going to be very little possibility that the bank

will be completely exonerated.

The jury's going to find them guilty of something.

>> If we go down on one, it's a defeat.

It's got to be 80 to nothing.

If you're convicted on one felony,

there would be very serious ramifications for the bank.

>> "New York Times" article on Friday, June the 5th, 2015.

"After a four-month trial, a jury found Abacus Federal

Savings Bank and two of its senior officers...

...not guilty of grand larceny and other charges on Thursday,

rejecting the Manhattan District Attorney's attempt to prove

that the bank systematically lied for years

to the Federal National Mortgage Association.

After the court clerk read the 240 counts

and repeated the words 'not guilty' after each one,

members of the Sung family wept and embraced one another."

>> How do I feel?

>> I feel relieved.

>> So many emotions.

>> Very, very happy.

But I was told not to express any feelings.

>> No, no, during the trial.

Now you can express your feelings.

>> My father, we had to text him,

and actually you called him.

>> He didn't respond to the text, so then I called him.

He answered the phone and just sort of took a step back

and started microwaving his vegetables

and said, "Um, what?

There's a verdict?

Oh, should I come?"

I'm, like, "You're not processing."

>> I didn't feel great about it.

But I wouldn't have felt great if the verdict had been guilty.

The way that the law was read to us is that under each charge,

all of the different elements had to be met.

In my mind, there were quite a significant few

that three of the four requirements were met,

but not all of them.

And that's where the change came for the four of us

to move over to the "not guilty" side.

It was doing the right thing.

>> Abacus was not exonerated.

Was not exonerated.

Exoneration is when a person is proven innocent.

I don't think there's anything

here that says that Abacus was proven innocent.

>> "Poor loser" comes to mind.

There's a right thing to say when a prosecution office

loses a case.

"Although we disagree with the verdict,

we respect the jury's verdict."

>> Exactly.

>> Period.

>> Of course I'm very happy how it happened.

I'm very happy how it happened.

I feel relieved because it has been a long time.

I just want-want-want...

to resume my normal life.

>> "The bank's founder, Thomas Sung, 79...

...said, 'This wrongful prosecution has exhausted

a small community bank such as ours.

This is a gross injustice not only to a small bank,

but is casting a shadow on our community.

This is totally prejudicial and incorrect.'"

>> We Chinese have to learn from other minorities.

When it comes to the community's interest,

you must let those who are in power know that

this shall never happen again.

(speaking Chinese):

>> (speaking English):

Superimposed!

(conversing in Chinese):

>> I'm so glad we are all here in a very happy occasion,

and I want to thank everybody's support

and dedication this last five years.

And let's look for happier days to come.

>> Hear, hear!

>> Let us eat cake.

>> Let 'em eat cake.

>> This is really good.

>> It's green tea, black bean green tea.

There's many different flavors.

It's not really a celebration.

I mean, we were vindicated, and that's great,

but our goal was never to go through a criminal trial

and be vindicated.

Our goal was to serve our community, right?

So this is such a waste.

It's a tragedy.

We have a lot of cake.

We may have too much cake.

>> The fact that they're found innocent gives all of us hope

that the America that we believe in, you still have a chance.

But it will cost you $10 million.

>> The Chinese has a saying: "If you want a really hard,

sharp steel, make a sword, you have to go through fire."

This experience should make my daughters stronger,

make them a better person.

>> I got a text from a friend.

She said that she looked at the news this morning

and felt proud of being a Chinese-American.

So that actually makes all of this worthwhile.

>> Go to pbs.org/frontline to read an interview

with "Abacus" director Steve James.

And coming soon, the Frontline Dispatch,

a new original podcast series.

>> I'm Raney Aronson, Frontline's executive producer.

We're going to be tackling the toughest subjects.

>> I was caught in a car bomb in Mosul.

>> The thought of marriage at 14...

>> They were killed by militiamen...

>> Subscribe now on our website or wherever you listen

to podcasts.

And sign up for our newsletter at pbs.org/frontline.

>> NARRATOR: As tensions between the U .S. and North Korea mount,

a rare glimpse inside the regime.

>> The half-brother of North Korea's leader was assassinated

using toxic nerve agents...

>> NARRATOR: The story of who killed

Kim Jong Un's half-brother

and the North Korean leader's deadly rule.

>> I think Kim Jong Un wanted to make a point

to any would-be rivals.

"I can kill you in any manner."

>> Kim Jong Un, in order to survive,

he had to conduct politics, and politics inside North Korea

is a bloodsport.

>> For more on this and other Frontlineprograms,

visit our website at pbs.org/frontline.

Frontline's "Abacus: Small Enough to Jail"

is available on DVD.

To order, visit shopPBS.org or call 1-800-PLAY-PBS.

Frontline is also available for download on iTunes.

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