The 2008 financial crisis felt like a ghost story where nobody actually saw the ghost. Trillions of dollars evaporated. Millions of people lost their homes to foreclosure. The global economy basically hit a brick wall at sixty miles per hour. Yet, when the dust settled and the government started handing out bailouts, a weird silence fell over the Department of Justice. Everyone expected handcuffs. Instead, we got "Too Big to Fail." But there was one outlier that almost nobody remembers unless they’ve seen the documentary by Steve James. A tiny, family-run bank in Chinatown, New York, became the only US bank to face criminal charges related to the mortgage crisis. This is the story of Abacus Small Enough to Jail, and honestly, it’s one of the most frustrating examples of selective justice in American history.
It’s surreal.
While the titans of Wall Street—the folks at Goldman Sachs, Lehman Brothers, and Merrill Lynch—were navigating the wreckage of toxic subprime assets without seeing the inside of a courtroom, the Manhattan District Attorney’s office was busy hauling employees of Abacus Federal Savings Bank through the hallways in a literal chain gang. You’ve probably seen the footage. It looks like something out of a different century.
What was Abacus Federal Savings Bank anyway?
Founded by Thomas Sung, a lawyer and immigrant from China, Abacus was a community pillar. It wasn't some high-frequency trading firm. It was a place where local residents, many of whom didn't speak English as a first language or have traditional credit histories, could get a mortgage. In many immigrant communities, the economy runs on cash. Documenting that for a Fannie Mae loan is a nightmare. Sung started the bank to bridge that gap.
By 2009, Abacus was the 2,531st largest bank in the United States. It was microscopic. But it was also the bank that Cyrus Vance Jr., the Manhattan DA at the time, decided to make an example of.
The weird irony of Abacus Small Enough to Jail
The most bizarre part of the whole Abacus Small Enough to Jail saga is how the investigation actually started. Most bank frauds are uncovered by whistleblowers or federal regulators. This one? The bank found it themselves.
Thomas Sung’s daughter, Vera, actually discovered that a loan officer named Ken Yu was basically running a side hustle. He was skimming money and falsifying documents to push loans through. What did the Sungs do? They did exactly what you’re supposed to do. They fired him. They hired an independent investigator. They reported the fraud to the regulators.
Usually, that’s where the story ends for the institution. You fire the bad actor, you tighten your internal controls, and you move on. But for Abacus, this was just the beginning of a five-year legal nightmare that cost the family $10 million in legal fees.
Why did the DA go after them?
Critics often argue that the prosecution was a play for "low-hanging fruit." After the public outcry over the lack of prosecutions following the 2008 crash, the DA’s office needed a win. They needed a scalp. But going after a global bank with an army of white-shoe lawyers is hard. It takes years. It’s expensive.
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Going after a family-owned bank in Chinatown? That’s a lot easier.
The charges were serious: grand larceny, scheme to defraud, and conspiracy. The prosecution's narrative was that the bank’s culture encouraged the fraud. They argued that the Sungs knew their employees were fudging numbers to get loans approved by Fannie Mae.
Here is the kicker: Abacus had one of the lowest default rates in the entire country.
Think about that for a second. While the rest of the banking world was collapsing because people couldn't pay back their loans, the loans at Abacus were actually performing. People were paying their mortgages. Fannie Mae wasn't losing money on Abacus loans; they were actually making money. This wasn't the systemic, predatory lending that broke the world economy. It was a clerical mess in a tiny corner of the market, yet it was treated like the crime of the century.
The human cost of the chain gang
There is a specific image from the Abacus Small Enough to Jail documentary that sticks in everyone's craw. It’s the "perp walk."
The DA’s office didn't just arrest the accused employees. They handcuffed nineteen people together in a long line and paraded them past the media. It was a spectacle. For the Chinese-American community, this was a massive insult. It felt like "othering." It felt like the authorities were picking on a group they perceived as weak or less likely to fight back.
They were wrong. The Sungs fought back.
Thomas Sung and his daughters—Vera, Jill, and Chanterelle—refused to take a plea deal. They knew that a guilty plea would destroy the bank and the family’s reputation. So they went to trial. It lasted four months. It was the longest criminal trial in the history of the New York Supreme Court.
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The verdict and what it actually means
In the end, the jury saw through it. They deliberated for eleven days. On June 4, 2015, Abacus Federal Savings Bank and its employees were acquitted on all 80 counts. Every single one.
The jury recognized that the "fraud" was the work of a few rogue employees, not a top-down conspiracy by the Sung family. One juror later mentioned that the prosecution’s case felt thin. It felt like they were trying to fit a square peg in a round hole just to say they’d prosecuted a bank.
But the "victory" was bittersweet.
- The bank spent $10 million on defense.
- The family’s reputation was dragged through the mud for years.
- The real architects of the 2008 crisis remained untouched.
Selective prosecution is a real problem
The Abacus Small Enough to Jail case isn't just a story about a bank trial. It's a case study in how the legal system treats different classes of people and businesses.
When Eric Holder, then the US Attorney General, spoke about "collateral consequences," he was basically saying that if we prosecute a massive bank like HSBC or JPMorgan, it might crash the economy. That’s the "Too Big to Fail" doctrine. It creates a tier of immunity for the ultra-wealthy and the ultra-powerful.
Abacus didn't have that protection. They were "Small Enough to Jail." Because their failure wouldn't cause a global recession, they were fair game. It’s a cynical way to run a justice system.
What can we learn from the Sung family?
The Sungs' resilience is honestly incredible. Most people would have folded under the pressure of the Manhattan DA. Thomas Sung, who was 75 at the time the trial started, showed a level of grit that is rare in the corporate world. He wasn't just defending his bank; he was defending his community’s right to exist within the American financial system.
If you ever get the chance to watch the documentary, pay attention to how the family interacts. They are experts in their field, but they are also deeply human. They eat together, they argue, they stress out. It’s a stark contrast to the sterile, PR-managed image of modern banking.
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Actionable insights from the Abacus case
If you are a business owner or even just someone interested in how the economy works, there are real takeaways here. It’s not just a history lesson.
1. Internal audits are your only defense.
The Sungs actually did the right thing by catching the fraud themselves, but they lacked the ironclad documentation to prove they weren't involved initially. If you run a business, you need "paper trails on top of paper trails." Don't just fire someone; document the exact moment you discovered the issue and every step you took afterward.
2. Know the difference between regulatory compliance and criminal intent.
The government often tries to bridge the gap between "we made a mistake" and "we committed a crime." In the Abacus case, the prosecution tried to turn sloppy paperwork into a criminal conspiracy. Being "mostly" compliant isn't enough when a prosecutor is looking for a win.
3. Community reputation is a double-edged sword.
The community stood by the Sungs, but the bank also suffered because of the stigma of the arrest. If you operate in a niche or immigrant community, your reputation is your most valuable asset. Once the "perp walk" happened, many people who didn't know the details assumed the bank was crooked. Recovering from that takes decades, not years.
4. Fight when you're right, but count the cost.
The Sungs won, but it cost them $10 million. In the legal world, "winning" often looks like losing slightly less than the other guy. Before you go to war with a government entity, you have to be prepared for total exhaustion.
The story of Abacus Small Enough to Jail serves as a permanent reminder that the scales of justice aren't always balanced. Sometimes, they're tipped by whoever is easiest to tip over. While the big banks got bailouts and bonuses, the small bank in Chinatown got a chain gang. It's a story that everyone who cares about the American dream—and the American reality—needs to understand.
Next Steps for Understanding Financial Justice
To get the full picture of how the 2008 crisis was handled (or mishandled), you should look into the "Statement of Facts" released by the DOJ during the settlements with the major investment banks. Compare those documents—where banks admitted to massive, systemic fraud but paid fines instead of facing jail time—to the transcripts of the Abacus trial.
You can also read The Financial Crisis Inquiry Report to see just how deep the rot went in the firms that were never prosecuted. Understanding the contrast between those two worlds is the only way to truly grasp the significance of what happened to the Sung family.