“Abacus: Small Enough to Jail” is a new documentary from “Hoop Dreams” director Steve James about a tiny, family-run Chinatown bank that was the only financial institution indicted following the financial meltdown. The original 184 indictments issued by the office of New York City District Attorney Cyrus R. Vance, Jr. were reduced to 80 before the trial. Vera and Jill Sung, daughters of the bank’s immigrant founder and vibrant presences in the trial and in the film, said in an interview that their only regret about the documentary is that restrictions on filming in the courtroom meant that they could not include footage of the 80 “not guilty” verdicts being read out at the conclusion of the trial.
The massive financial institutions involved in the meltdown were making so much money with mortgage-based derivatives that they ran out of mortgages to stuff into them. So they started lending money to people who would not otherwise qualify and misrepresented the reliability of the loans and the derivatives they supported. None of these enormous “too big to fail” financial institutions were indicted. But Abacus never made “liar’s loans.” Its repayment rate is close to 100 percent. The government never lost any money and they never required a bailout. And yet, the tiny five-branch bank and its executives were tried on criminal charges.
As the film shows, Abacus founder Tom Sung was already a very successful lawyer and businessman when he was inspired by “It’s a Wonderful Life” to become the George Bailey of the mostly-immigrant Chinese community. Traditional banks were happy to take their deposits but reluctant to loan money to them. He named the bank after the ancient calculator that has symbolic importance in Chinese culture and he made sure that the staff spoke the customers’ language.
Tom Sung’s daughter Jill, president of the bank, became suspicious of an employee who turned out to be extorting side payments from bank customers and immediately informed the authorities. The ensuing investigation uncovered irregularities in the paperwork, mostly because the Chinatown community was reluctant to provide full documentation in their loan requests. But there were no irregularities in the risk assessments or payouts. Jill said in our interview, “The loans that were actually brought in the indictment all are either still performing or the borrowers paid them off.”
Then why bring a case that was evidently inadequate that 80 charges produced not even a single guilty verdict? Jill said it was a combination of three factors. “You have a DA who was politically ambitious and he’s in the financial capital of the world,” there was pressure to respond to the sub-prime financial meltdown, and racism: “if it was not the primary motivator it certainly colored the whole prosecution and how his team approached the weaknesses in the community.” Jill’s sister Vera, a director of the bank, added, “It’s a subtle form of intimidation but not so subtle, coming to your house at six in the morning, knocking on your door, gun at their sides, and saying ‘Hi, we would like to interview you. Could you please come down?’ For a lot of people who do not speak English and who were not born here and who comes from a country that is a police state, that is very intimidating and they will do or say anything to appear cooperative.” “They said, ‘Don’t forget, we can send you back.’ The tactics they used were clearly intended to intimidate,” Jill said. “The tactics they used was clearly targeted to fears that they knew existed in the community and they use that.”
This was even more evident in the highly unusual televised perp walk, with the bank’s employees handcuffed together. “There was no concern of security,” Vera said. “Why are their chains exposed? Usually people put their coats over them, but that didn’t happen here. Whoever has seen that, it will stay with them and they will think, ‘Oh, they’re all guilty.’”
The government, in a highly unusual move, rescinded the plea agreement with their star witness, the employee Jill had identified as stealing from the bank and its customers, because his testimony was so thoroughly discredited.
But the movie is more than the story of a business or an unjust prosecution. It is ultimately the story of a family and their devotion to each other and to their community. Jill and Vera spoke about what they did to find moments of peace in the midst of the pressure of the trial. For Jill, it was her family. “I was able to shut it down when I was home.” In the courtroom, she took notes to help her keep her composure. Vera did yoga. “It’s very hard when you’re involved in an event like this. It just subsumes everything, your sleep, your dreams. You’re constantly thinking about it, you’re constantly thinking about what you’re going to do to prove them wrong or how you can show them they’re thinking wrong. It’s so hard not to let it invade you in that sense. You just have to have off times.”
They were glad to have their story told, first in a New Yorker story by Jiayang Fan, and then in this documentary. And they are glad to be back in business. “It has taken a while because the case went on for five years when we were not able to do the business we wanted to, so it’s taken about a year to rebuild, to establish contacts with contracts, with our counterparties because no one wants to do business with a bank that’s indicted,” Jill said. “We’ve been working to re-establish with our community that we’re here, that nothing is going to happen to us because we survived. You can do a lot more with us now.” They are still trying to be the George Bailey of their community. “We want to make loans to the small businesses and the first-time home buyers,” Jill said. “That’s our mission,” added Vera. “That’s what we want to do. So that’s what we’re doing.”