One afternoon in the fall of 2009, Jie Chen and Ariel Chi walked into the headquarters of Abacus Federal Savings Bank, near Canal Street, to inquire about a mortgage. Chi, who was twenty-four and worked in customer service at a pharmaceutical company, had spent nearly her entire life in the United States, after her family came from Taiwan. Chen, her husband, who was a year younger, had arrived in his late teens and spoke little English. They had been married for a year and spent almost all their time in New York’s various Chinese enclaves, especially Bensonhurst, Brooklyn, where Chen worked at a hair salon. They’d been living in Chen’s studio apartment, not far away, but Chi was now pregnant with their first child and they needed a bigger place.

The plan was to buy a two-family house and rent out one of the units. Looking around the neighborhood, they found one with a small garden out front. The asking price was seven hundred and eighteen thousand dollars, and they began putting together a down payment with money from savings and relatives. The difficulty was getting a loan. The subprime-mortgage crisis of 2008 had exposed lax lending standards throughout the banking industry and credit was tight. Chen had no credit history and was paid largely in cash. “We were asking everywhere,” he told me in Mandarin when I visited him recently at the salon. Many people he knew in Chinatown had similar problems. His co-workers at the salon suggested a solution. “People said go to Abacus. Go to Abacus,” he recalled. A hair washer told him, “It approves loans without too much fuss.”

Abacus was founded thirty years ago by Thomas Sung, a lawyer and a real-estate investor who had come from China in his teens. It is one of a dozen or so community banks in Chinatown that cater to immigrants, including undocumented ones, who often inhabit a cash economy and mistrust mainstream banks. For more than two decades, Abacus had grown at a healthy rate; the year that Chi and Chen applied for their loan, it had six branches and some hundred and fifty employees, and originated about half a billion dollars in loans.

At the Abacus headquarters, Chen and Chi went to the loan office, on the third floor, and were greeted by a stocky, talkative man named Ken Yu. Chen felt an immediate rapport. Yu was only a few years older, and, it turned out, was from Chen’s home town, the coastal city of Wenzhou. He said that getting a loan would be easy if they just left everything to him. They agreed on terms, and in the weeks that followed the bank obtained employment documents while the couple wrote checks and submitted letters accounting for money family members had given them. Chen’s parents wired funds from China, which they had borrowed using their home as collateral. Chen had already begun mapping out in his head which half of the house the family would live in, which half they’d rent out, where they’d put the nursery.

The closing meeting for the house took place on the morning of December 11th. Chen and Chi left their infant son with Chi’s parents before heading over to Abacus. There they met their lawyer; the seller of the house and his lawyer; and Vera Sung, a daughter of Abacus’s founder and an attorney who represents the bank during closings. Chen found the meeting, which was conducted in English, hard to follow. Still, he said, “I didn’t care so long as I got my house.” But as one of the last papers was being signed Chen remembered something: his wife had written Ken Yu two checks totalling twenty-five hundred dollars, and he wanted to make sure that this money had been credited along with his other payments. When the couple’s lawyer asked about the checks, however, everyone reacted in confusion and Vera demanded to see Ken Yu. “I had no idea what was going on,” Chen said. “Nobody explained anything to me.” After Vera and her sister Jill, the bank’s president, questioned Yu and found his answers suspicious, they called off the close. (It later emerged that Ken Yu had not only taken money from the couple but had also misrepresented income details in the mortgage application.) “It was like the sky had fallen and my world collapsed,” Chen told me. He knew that the seller would likely get to keep the ten-per-cent deposit the couple had already paid. The money—seventy-two thousand dollars—was more than two years’ salary. “It’s the blood-and-sweat money that I earned,” he said. A month after the meeting, the couple walked into the N.Y.P.D.’s Fifth Precinct, a few minutes from the bank. They told the police that an employee of Abacus Bank had stolen money from them.

By then, the Sung sisters had fired Ken Yu and two other employees and the bank had begun an internal investigation. It reported the findings to regulators and law enforcement and later hired outside investigators to examine the loan department. But Chen and Chi’s visit to the police had also triggered a criminal probe. On May 31, 2012, Cyrus R. Vance, Jr., the Manhattan District Attorney, announced a hundred-and-eighty-four-count indictment against the bank, two of its supervisors, and nine of its former employees. The charges included residential-mortgage fraud, falsification of business records, and conspiracy. Abacus employees were marched through the Manhattan Criminal Courthouse, handcuffed together. Some faced a maximum sentence of twenty-five years in prison.

Ten Abacus employees accepted plea deals in exchange for testifying against the bank, and Ken Yu became the star witness. The indictment alleged that, in order to approve mortgages for unqualified borrowers, the bank had systematically falsified loan-application documents, “inflating or exaggerating their assets, incomes, and job titles.” This resulted in “fraudulent mortgages” being sold to Fannie Mae, the federally backed mortgage company. Fannie Mae’s purchase of risky mortgages was a widespread problem during the subprime lending crisis, something that Vance emphasized in a press conference announcing the indictment. “If we’ve learned anything from the recent mortgage crisis, it’s that at some point, these schemes unravel and taxpayers can be left holding the bag,” he said.

But in some ways Abacus was a surprising target for a high-profile mortgage-fraud case. Of the four thousand three hundred and ninety mortgages that Abacus held in 2009, only sixteen were in trouble, a delinquency rate less than a twentieth of the national average. Chinese immigrants, poor though some of them were, seemed to be far more dependable as borrowers than the rest of America. Of all the institutions that were investigated for mortgage fraud after the financial crisis, the only commercial bank that was brought to trial was a small community bank whose assets had never exceeded two hundred and eighty-two million dollars—around a hundredth of one per cent of the assets of Bank of America.

The office of Thomas Sung, the founder of Abacus, is three floors above where the tellers sit at the bank’s headquarters. It is a ramshackle room, determinedly functional and frugally furnished. When I first visited, in February, boxes of files formed a mountain on the floor, law journals were piled on cheap shelving, and a straggly potted palm wilted in a corner. The only color was from the tea sets, a traditional Chinese ceremonial gift, that had been left lying around. To Sung’s customers, the décor would be reassuring; it is the office of someone who knows that money is too important to be spent casually.