Former CEO Of Municipal Credit Union Sentenced To 5½ Years In Prison For Multimillion-Dollar Fraud And Embezzlement Scheme
Geoffrey S. Berman, United States Attorney for the Southern District of New York, announced today that KAM WONG, the former chief executive officer (“CEO”) of Municipal Credit Union (“MCU”), a non-profit financial institution, was sentenced today in Manhattan federal court to 66 months in prison for defrauding and embezzling millions of dollars from MCU during his time as CEO. WONG previously pled guilty to embezzlement from a federally insured credit union before U.S. District Judge John G. Koeltl, who imposed today’s sentence.
U.S. Attorney Geoffrey S. Berman said: “For years, Kam Wong, the then-CEO of New York’s oldest credit union, betrayed the credit union’s hard-working members from the perch of his executive suite by siphoning off millions of dollars in company money for his personal benefit. Wong then tried to cover up what he had done by making false statements to federal investigators and creating false and misleading documents. He will now serve a substantial prison sentence for his crime. I commend the Special Agents of the U.S. Attorney’s Office, and our law enforcement partners, for their tireless efforts to protect the credit union’s members and expose misconduct in this ongoing investigation.”
According to the Complaint, the Information, other filings in Manhattan federal court, statements made in court and publicly available documents:
WONG, from 2007 until shortly after his arrest in May 2018, was the CEO and president of MCU, a non-profit financial institution headquartered in New York, New York, which is federally insured by the National Credit Union Administration (“NCUA”). MCU is the oldest credit union in New York State and one of the oldest and largest in the country, providing banking services to more than 588,000 members, including municipal, state, and federal workers in New York City. MCU’s earnings are intended to be directed back to its members in the form of more favorable rates and fewer and lower fees for products and services.
During his tenure as CEO and president, despite publicly praising credit union values, WONG engaged in a long-running multi-faceted scheme to obtain money from MCU to which he knew he was not entitled, and took steps to seek to conceal what he had done. Among other things, WONG embezzled from and defrauded MCU by submitting sham invoices for dental work never performed on him or paid by him, and, as a result, obtained reimbursement for hundreds of thousands of dollars of such nonexistent dental work. In addition, WONG fraudulently caused MCU to pay him additional monies that he knew he was not entitled to receive, including millions of dollars of payments in lieu of purported long-term disability insurance, and for purported taxes owed on these and other employment benefits. In total, WONG defrauded MCU out of at least approximately $9.9 million.
WONG also repeatedly misapplied money and other things of value from MCU, with respect to, among other things, the purchase of a Mercedes-Benz for his personal use; the leasing of multiple luxury vehicles for his personal use at the same time; the purchase of electronic devices (including, iPhones, iPads, and laptops) for personal use by WONG and others; reimbursement, as business expenses, of personal expenses, including hotel stays and expensive meals; purported reimbursement payments for repairs to luxury vehicles MCU had leased for WONG, which repair work was already covered by MCU’s insurance; cash advances to which he was not entitled; educational, housing, and living expenses for two of WONG’s friend’s adult relatives, whom WONG caused MCU to hire; and payments for leave days that did not comply with and exceeded what was provided for under his employment contract. In addition, WONG caused MCU to pay hundreds of thousands of dollars to a former MCU Supervisory Committee member’s company, in violation of the MCU’s conflict of interest policy, so that the member would provide WONG with controlled substances for his personal use.
In January 2018, after WONG learned of the federal investigation, WONG sought to obstruct justice by making false statements to federal agents and creating false and misleading documents to try, after the fact, to explain and justify some of his illicit payments.
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In addition to his prison term, WONG, 63, of Valley Stream, Long Island, was sentenced to three years of supervised release, and was ordered to forfeit $9,890,375 and to pay restitution in the same amount to MCU.
U.S. Attorney Berman praised the outstanding work of the Special Agents of the United States Attorney’s Office. Mr. Berman also thanked the New York County District Attorney’s Office, the New York State Department of Financial Services, and NCUA.
The case is being prosecuted by the Office’s Public Corruption Unit. Assistant U.S. Attorneys Eli J. Mark and Daniel C. Richenthal are in charge of the prosecution, with assistance of Special Assistant U.S. Attorney Alona Katz from the New York County District Attorney’s Office.