Bank in NY's Chinatown to Resume Business after Rumor-ignited Panic Cash Withdrawal

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Last updated at: (Beijing Time) Thursday, April 24, 2003

Bank in NY's Chinatown to Resume Business after Rumor-ignited Panic Cash Withdrawal

The Abacus Federal Savings Bank in New York's Chinatown that was rushed Tuesday by hundreds of customers will open for business on Wednesday, said its president Thomas Sung.

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The Abacus Federal Savings Bank in New York's Chinatown that was rushed Tuesday by hundreds of customers will open for business on Wednesday, said its president Thomas Sung.

Sun, also founder of the bank, said the customers "overreacted" when they learned that a longtime employee had allegedly stolen more than 1 million US dollars from the bank through an elaborate check fraud scheme.

He said the bank, with 230 million dollars in assets, is "safe and sound."

"The embezzlement does not help our name, but it will not close us down," he said. "We are very strong."

More than 2,000 panicked customers swarmed the bank on Tuesday afternoon after a rumor started that an employee had embezzled more than 1 million dollars, bank officials and police said. Customers also lined up outside the bank's Flushing branch and at another Manhattan branch on Bowery Street.

Investigators say the rumor began when the bank posted a sign saying the branch manager was fired last week for financial irregularities.

The sign generated concern among customers but the run on the bank was fueled by rumors racing through the Chinese community that the bank had run out of money, said some customers.

Regulators at the Office of Thrift Supervision, which oversees Abacus, said run on banks, when depositors unexpectedly withdraw large amount of money because of fear about a bank's soundness, are uncommon in the United States.

A spokesman at the Federal Deposit Insurance Corp (FDIC) noted that the federal agency insures depositors' accounts for up to 100,000 dollars per account.

David Lee, manager of Abacus' Flushing branch also confirmed that the bank is insured by the federal government and is not closing.

"We are insured by the FDIC, so these people have no reason to be worried about their accounts," he said.

According to sources with the FBI, Carol Lim, the former manager of the Canal Street branch of Abacus Federal Savings Bank,is under investigation for bank fraud. She is also accused of setting up false accounts and illegally withdrawing money from customer accounts.

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