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Abacus Federal Savings Bank acquitted of fraudulent mortgage charges

Abacus Federal Savings Bank was acquitted of charges related to the alleged sale of fraudulent mortgages to Fannie Mae following a three-month trial.

The bank had been charged with allegedly selling fraudulent loans to Fannie Mae worth millions between 2005 and 2010.

Reuters quoted Manhattan Assistant District Attorney Rachel Hochhauser as saying to the jury: "We can’t discover the falsity underlying these loan documents and then sit around, waiting for a mortgage awarded based on them to stop performing."

According to the prosecutors, credit, employment, income and source of down payments of applicants were misrepresented.

The ruling came a day after a jury in New York acquitted the bank on charges of conspiracy and grand larceny.

The New York Times quoted bank founder Thomas Sung as saying: "This entire wrongful prosecution has exhausted a small community bank such as ours.

"This is a gross injustice, not only to a small bank, but is casting a shadow on our community, that this community somehow condones or conducts illegal activity. This is totally prejudicial and incorrect."

The bank predominantly serves the Chinese-American community in New York, New Jersey and Pennsylvania and provides mortgages to immigrants.

Headquartered in Chinatown, New York, the bank currently has around $300m in assets.