This film is about the only bank – the only bank! – to be indicted for mortgage fraud in the wake of the 2008 financial crisis. It tells the story of a bank in New York City’s Chinatown which detected loan fraud, fired the employee responsible, reported the fraud to their regulator, fired additional employees when more fraud was discovered, and then was prosecuted by the District Attorney of New York City, because some of the fraudulent loans were sold to Fannie Mae, where they made money.
There is no denying fraud took place. The issue is, rather, whether or not the higher ups at the bank (which had over 5 branches) could have and should have known about the fraud – or did – and whether or not they should have caught the fraud before they sold the mortgages to Fannie Mae. But there are a bunch of problems with the DA bringing this prosecution:
- The fraud was self-reported by the bank.
- The DA’s office continually insisted that the bank should have investigated its clients further, as if any other bank in the US did that on a regular basis, especially any bank serving the very cash-based Chinatown economy.
- The DA’s office treated the indictment as a circus – parading the accused into the courtroom as a chain-gang – and was clearly using it to score political points – “Look at us, having the guts to go after a bank after they ruined everyone’s lives!”
- ABACUS had a much better financial record than the vast majority of banks in the US at the time, including all of those responsible for the sub-prime crisis.
- The decision to go after a small (6,000th or so in size in the US) Chinese bank instead of oh, I don’t know, any number of other banks that caused far more harm but were judged “too big to fail” and so were instead given fines to pay and money to continue existence.
- The failure to offer a plea deal involving only fines, the kind of deal that was offered to all the major banks implicated in the sub-prime crisis.
- The fact that there was no victim in this particular case – this case was not about the fraud perpetrated against the borrowers of ABACUS – in fact, the lead perpetrator of that fraud was the key witness in the state’s case, if you can believe it – but rather about fraud perpetrated against Fannie Mae, who did not lose money.
The film itself is affecting and compelling. It shows how flawed and unequal the application of justice is in the US, even for some wealthy people. It is not James’ best film, but it still shows off his trademark ability to humanize his subjects better than just about anyone else, and to tell a compelling (and, in this case, humourous) story full of pathos. It’s worth finding this when it comes to Hot Docs Cinema or makes it to Netflix, if you’re interested in justice, or if you’re just looking for a film to both entertain you and make your blood boil.
To paraphrase one person in the film: “You can fight the system. It just costs $10 million.”