Abacus Federal Savings Bank Charged With Mortgage Fraud

Posted by Orb Staff on June 01, 2012 No Comments
Categories : Residential Mortgage

Manhattan District Attorney Cyrus R. Vance Jr. has announced the indictment of Abacus Federal Savings Bank and 11 of its former employees in a mortgage fraud scheme resulting in the sale of hundreds of millions of dollars worth of fraudulent loans to Fannie Mae. The district attorney also announced that an additional eight former employees have already waived indictment and admitted their guilt in connection with this conspiracy.

The 184-count indictment, which follows a two-and-a-half year investigation, includes charges of residential mortgage fraud, securities fraud, grand larceny, conspiracy and falsifying business records, among other related charges. The defendants include former senior managers, as well as former employees who worked in various capacities for the bank's lending business. Each defendant faces charges related to his or her involvement in the criminal conspiracy, which the indictment charges occurred between May 2005 and February 2010.

‘The lessons of the financial crisis are still being learned,’ says Vance. ‘The public must have confidence that when a bank issues a loan that it later re-sells to Fannie Mae – and, by extension, the nation's investors – it will engage in honest and ethical practices and follow the rules set by regulators. Loan schemes based on fraud inevitably will unravel, as this one did. Today's indictment reaffirms our commitment to transparency and straight dealing in the financial markets. We cannot settle for less.’

Abacus is headquartered in the Chinatown section of New York City. It operates seven branches across New York, New Jersey and Pennsylvania, and primarily serves the Chinese-American community.

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