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Documentary tells tiny bank’s David vs. Goliath story in 2008 financial crisis aftermath

Only one bank was indicted in the aftermath of the 2008 financial crisis, and it was a very small one. The Oscar-nominated documentary "Abacus: Small Enough to Jail" tells the story of its prosecution for mortgage fraud and its ultimate acquittal. Jeffrey Brown talks with director Steve James.

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  • Judy Woodruff:

    Much of the public anger after the financial crisis focused on banks and other large financial institutions. Many asked whether those banks were considered too big to fail and their executives too protected to go to jail.

    One of the documentaries nominated for an Academy Award this year looks at that question, but, as Jeffrey Brown tells us, through a very different lens.

  • Jeffrey Brown:

    A number of banks, including some of the biggest in the country, paid large fines, but just one bank was indicted for mortgage fraud related to the crisis. And it was a very small one, Abacus Federal Savings and Loan, located in New York's Chinatown.

    The story of its prosecution and ultimate acquittal is told in the documentary, "Abacus: Small Enough to Jail," which had a theatrical run and also aired on PBS' "Frontline."

    It's now been nominated for an Oscar for best documentary.

    Filmmaker Steve James joins me now. Among his previous work, the films "Hoop Dreams" and "The Interrupters."

    And, first, Steve, congratulations on the Oscar nomination.

    What attracted you to this story in the first place?

  • Steve James:

    What attracted me was, here was a story of a bank that discovered some low-level fraud going on, and they had acted to deal with it.

    They fired the employee. They initiated their own investigation. They reported it to regulators. But when it got to the DA's office in New York City, the DA decided that the bank itself, the president and the executives in the bank, were complicit in the fraud and even administrated the fraud.

    And they decided to then prosecute them. And they connected this whole case to the 2008 crisis, saying that this was indicative of what happened in 2008.

  • Jeffrey Brown:

    You have this remarkable family and the story behind the bank, Thomas Sung, who founded it in 1984 in Chinatown.

    Just tell us a little about the background of the bank.

  • Steve James:

    Yes.

    Well, Thomas Sung was a lawyer who realized that — he realized one day that, in his own community in Chinatown, that people could make deposits at banks and — but not get loans to build businesses or buy homes, and he decided that was something he wanted to try to change.

    So, he became a banker and started Abacus over 30 years ago, with the express purpose to serve that community and help build that community.

  • Jeffrey Brown:

    All right, so I want to show a little clip here, because this is — your film is about the bank and — but it's also an immigrant family and a very particular immigrant community, Chinese Americans in New York.

    So, let's look at this clip.

  • MAN:

    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.

  • WOMAN:

    Cyrus Vance just felt this is easier to attack. Especially, it's 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.

  • MAN:

    Although this is David vs. Goliath, David, being Abacus Federal Savings Bank, has a slingshot. And that is, you know, their whole family of lawyers.

  • Jeffrey Brown:

    The daughters were — several of them are lawyers. They were working with the bank. They got very involved with this.

    The argument from the family and bank was, we're doing good on our community, and you're picking on the wrong people. Right?

    And you seemed — you were sympathetic to that argument?

  • Steve James:

    Oh, I was very sympathetic to it, and also to the fact that they seemed to do everything they could to try to root out the fraud themselves. And they even cooperated with the DA's office, until they realized that they were the target of the investigation.

    So, nothing that they did bespoke a bank that was trying to orchestrate fraud or even hide the fraud.

  • Jeffrey Brown:

    The Cyrus Vance, who is mentioned in the clip, he's the Manhattan DA. And it was his office who brought this. He spoke to you for the film.

  • Steve James:

    He — for the record, he still believes that this was an appropriate case to bring. He does. I mean, we interviewed him after the case, and he felt just as strongly after the verdict as he did while they tried the case.

    And I don't know. It bewilders me, I think, a little bit. I think that he really did believe there was fraud going on, is sincere. But I do think his judgment was clouded by the fact that there was ambition there to be the office that brought a case against a bank in the wake of the 2008 crisis.

    And nowhere is that revealed more plainly to me than in the indictment, in the announcement of it. He had the feds from Washington behind him. And then he also orchestrated this chain gang of mostly ex-employees, low-level employees, members of the Chinese community chained together, and paraded in front of the media.

  • Jeffrey Brown:

    But this goes to really the larger context for the film, and, I mean, something we covered for years on this program, looking at the aftermath of the 2008 financial crisis.

    It's — the subtitle is "Small Enough to Jail," obviously playing on the too big to fail. So the question you're raising is why this bank or why just this bank and not other banks.

  • Steve James:

    Yes.

    And if he had gone after Bank of America, if the feds had let him do that, they would still be in discovery. I think there was a belief that this bank, because it was a Chinese American bank, there wasn't going to be any kind of political fallout from this. I think he really believed that this bank would roll over and it probably would never go to trial.

    It's interesting. The big banks were all offered non-prosecution agreements, right? They paid big fines. We bailed them out, too. But they paid big fines, and it all went away.

    With Abacus, they didn't get that offer. They were offered a felony conviction, plus a fine. And they really believed so firmly they were innocent, they weren't going to take a deal like that.

  • Jeffrey Brown:

    So, let me just ask you, finally, as a filmmaker, when you're looking for a story to tell, were you starting off with the big story, looking at the financial crisis and what happened with the banks, and this was your way in, or was it — did you start with this small story?

  • Steve James:

    Well, I started with the story of what looked to be like an unequal application of justice in America, this bank being picked on. That was the initial hook.

    But the heart of the story is this family, as you mentioned earlier, the integrity, the commitment, the courage that they showed. And it is really very much a human story about a Chinese American family that pushes back and doesn't give in to this wrongful prosecution.

  • Jeffrey Brown:

    And, briefly, how are they doing now and how is the bank doing?

  • Steve James:

    The bank's doing great now. They lost money during this whole period of indictment and the trial, but they have rebounded since.

    Fannie Mae, the alleged victim in this case, is now back in business with Abacus. They're happy the trial is over. And things are well. There are even people who have made deposits at their bank that don't even live in Chinatown in support of the bank after seeing the film, which is really kind of sweet.

  • Jeffrey Brown:

    OK, the film is "Abacus: Small Enough to Jail," nominated for an Oscar. Good luck with that.

    Steve James, thank you for joining us.

  • Steve James:

    Thank you for having me.

  • Judy Woodruff:

    And you can watch "Abacus" online on at PBS.org/wgbh/frontline.

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