A New York-based savings bank serving the Chinese community has been indicted along with former executives, loan originators and employees for defrauding the Federal National Mortgage Association.
The scheme involved “hundreds of millions of dollars” in fraudulent loans.
A 184-count indictment includes charges of residential mortgage fraud, securities fraud, grand larceny, conspiracy and falsifying business records.
The indictment of Abacus Federal Savings Bank and the former employees was announced Thursday by Manhattan District Attorney Cyrus R. Vance and followed a two-and-a-half year investigation.
The bank is based in Chinatown and operates seven branches in New York, New Jersey and Pennsylvania. It was founded in 1984 and employed 117 people as of March 31. Total assets are $249 million including $50 million in residential loans and $68 million in commercial mortgages.
It allegedly earned millions of dollars in origination fees, purchases fees and servicing fees from 2005 until 2010 as a result of the scheme.
“Notwithstanding the fact that these loans were replete with misrepresentations and falsified information, Abacus represented to Fannie Mae that the loan documents were accurate and truthful, a prerequisite for purchases made by Fannie Mae,” the announcement stated.
In addition to the bank, those indicted include former chief credit officer Yiu Wah Wong, who reported directly to the bank’s chief executive officer, and former loan origination supervisor Wai Hung Tam.
Wong and Tam allegedly trained lower-level employees to disregard the accuracy of loan applications and instead focus on enabling borrowers to qualify for Fannie Mae mortgages. Employees were also directed not to raise any flags for the bank’s regulator, the Office of the Comptroller of the Currency.
Underwriters charged in the scheme include Victoria Tsui and Yi Yi Zhao, while Andy Chen already pled guilty to falsifying business records.
Indicted originators include Wen Fang Wang, Ying Chuan Wang, Jie Qiong Nan, Chi Fung Lau and Phoebe Lee. In addition, former originators who have already pled guilty to felonies in the case include Qibin Yu, Ruo Lan Chen, Lien Quach, Xiaomin Huang and Yim Cheng. Loan officer Jin Hua Zhang was charged in a felony complaint with falsifying business records.
Loan processors Wai Ching Wong and Yuk Yin Lam Cheng allegedly manipulated loan origination systems and created fake verifications of employment to make it look like the borrowers had enough income. Another processor, Michelle Wong Li, previously pleaded guilty to falsifying business records.
