A Morning at Cy Vance’s Office: Mortgage Fraud and Etan Patz


“This scheme is plotted on the chart to my left –the smallest demonstrative exhibit that I’ve ever seen used in the DA’s office,” said Manhattan District Attorney Cy Vance Jr.

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photo 3 400x298 A Morning at Cy Vances Office: Mortgage Fraud and Etan Patz
Manhattan D.A. Cy Vance, with tiny exhibit on the right.

The exhibit Mr. Vance was referring to during a press conference in the 8th floor Library at One Hogan Place earlier today was indeed small, just barely large enough to be read from a generous distance.

The scheme, however –in which Abacus Federal Savings Bank, a bank with predominantly Chinese clientele, allegedly helped its customers submit fraudulent mortgage applications that resulted in approximately a billion dollars worth of mortgages issued out by Fannie Mae– was infinitely larger in size, scope and relevance.

Nineteen individuals, all former employees and managers of Abacus Federal Savings Bank, were indicted as a result of the scam. Seven of those people already entered guilty pleas, while the remainder of them were set to face arraignment –and Judge Renee White– in state court in Manhattan throughout the day. 

By also indicting Abacus itself, the bank became the first financial institution to be charged by the Manhattan D.A.’s office since the Bank of Credit and Commerce International was indicted in 1991 for paying large bribes to bank regulators and central bankers in 10 countries like Pakistan and Nigeria.

Between May 11, 2005 to February 3, 2010, Abacus, Mr. Vance alleges, encouraged its applicants to fudge its personal information –like immigration and employment status– to secure these mortgages.

“These borrowers primarily work in cash-only businesses in the Tri-State area –restaurants, nail salons, and the like,” said Mr. Vance, as he read from a prepared statement. Without Abacus’ help in fudging the information in their mortgage applications, these applicants would have never qualified for Fannie Mae’s assistance.