Vicious Rants of an Angry Yellow Man

Watched the documentary "Abacus" on Netflix last night.  I am surprised that I didn't learn about it sooner, given that it was nominated for an Oscar.  It is the real story of a small Chinese owned bank in Chinatown New York being the only bank charged with fraud in connection to the mortgage collapse of 2008.  It was a well made movie and I would recommend it strongly.

Without spoiling the movie for anyone who wishes to see it, I will just make a few points of interest.  First, given all the banks that are much larger and obviously committed fraud during the mortgage crisis, I am amazed that the government chose to prosecute a small bank which was thriving and had one of the lowest loan default rate in the country!  The DA had claimed that Abacus bank had defraud Fannie Mae with false applications,  When it was pointed out that Fannie Mae actually made tons of money from Abacus loans, the DA said that if you took $5 from me and then gave it back later, you still committed larceny.  Well, it you took $5 and gave back $5 plus interest later, that is the definition of a good loan, not larceny in my book!

I was shocked that the government had arrested all the executives of the bank at the same time, even the ones that already turned themselves in earlier.  They were all handcuffed in a chain gang formation to parade through the court house!  I don't remember any Wall Street or large bank executives even got arrested, never mind being chain ganged. Well, first of all none of them, despite causing great harm to the financial system, was ever charged.  But even if they were charged, they would have just turned themselves in without being chain ganged.  Are all these Chinese people a threat to the arresting officers?

There are some lessons to be learned here.  One is that  the way Chinese communities, for that matter any immigrant community, do business may cause trouble for them in dealing with mainstream Americans.  What is considered fraud by mainstream America and the government, is not considered fraud by immigrant communities.  These "frauds" had no detrimental effect on loans.  It is not fraud when compared to the real crimes committed by mainstream banks.  Those are the banks that caused the financial crisis, not Abacus or other immigrant run banks.

So is this a racist prosecution?   I believe it is.  While the DA was not necessary out to get a Chinese bank, I believe that his office believed that a Chinese bank is a way easier target than a mainstream bank.  I believe that the DA probably wanted to make a name for himself for being the first one to get a conviction from a bank during the mortgage crisis.  I think the DA believes that a Chinese bank would be too intimidated by the government and would plea a deal.  An easy victory, he assumed.

Turns out Abacus did not cave.  They spent millions to defend their honor.  I am glad they did.  It took courage and signal to the country that Chinese immigrants may not be the pushovers that are portrayed frequently.