Feds File Suit Against Disgraced Chinatown Banking Magnate Tommy Wu

The federal government filed criminal charges and civil suits yesterday against several top officials of United Commercial Bank, a San Francisco financial institution that did hefty business among Chinese-American immigrants before it collapsed in 2009.

Tommy Wu, the bank's CEO, was the subject of a profile by former SF Weekly Staff Writer Matt Smith last year. Wu was not charged criminally yesterday, but hit with a civil complaint alleging that he and his lieutenants engaged in "a series of deceptive acts that caused the bank's holding company to understate its 2008 operating losses by at least $65 million, or 50 percent," according to the San Francisco Chronicle.

Smith's story delved into how Wu, over the course of a decade, managed to deceive banking regulators and credulous journalists into thinking his business's teetering loan portfolio was sound. (Click here for a 2003 interview with Wu where Chronicle editors and reporters pitch him what in retrospect are a laughable series of softball questions about the bank's success.)

As Smith put it:

By straddling the new U.S.-Asian economy, the slight, jug-eared badminton enthusiast could boast to folks back home in Hong Kong that he'd made it really, really big. From 29 California branches in 2001, his bank expanded to 70 nationwide in 2007. Wu opened a branch in Hong Kong, where he was frequently seen at the $500-per-night Conrad Hotel. Shares in his bank's holding company, UCBH, went from $7 in 2001 to $18 in 2007.

In 2009, when United Commercial collapsed, it took with it $1.6 billion in FDIC insurance funds and $300 million from the Troubled Asset Relief Program (TARP).

Criminal charges were also filed yesterday against former United Commercial COO Ebrahim Shahudin and senior vice-president Thomas Yu for allegedly hiding records of hazardous loans from regulators and the public.

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