NEW YORK – A New York bank and 19 ex-employees have been indicted on charges of issuing hundreds of millions of dollars of fraudulent mortgages that were later peddled as promising securities to unwitting investors.
Manhattan District Attorney Cyrus R. Vance Jr. announced mortgage fraud and other charges Thursday against Abacus Federal Savings Bank and the workers.
Several people already have pleaded guilty. The others, including the Chinatown-based bank, were awaiting arraignment. Attorney information wasn’t immediately available, and no one answered the bank’s phone.
Prosecutors say Abacus systematically falsified documents to make unqualified borrowers pass muster for mortgages. The bank sold the loans to mortgage giant Fannie Mae, which repackaged them as securities for investors.
Prosecutors says most loans are being paid back, the bank is stable and depositors’ money isn’t at risk.