New York County Supreme Court and U.S. District Court – Southern District of New York at background.
Kam Wong, former president/CEO of the $2.9 billion Municipal Credit Union pleaded not guilty to embezzlement, bank fraud, wire fraud and aggravated identify theft last week in Manhattan's U.S. District Court.
The felonies stem from a criminal complaint that surfaced in May following a federal investigation that accused the 62-year-old executive of allegedly stealing millions of dollars from MCU through various fraudulent reimbursement schemes from 2013 to 2018.
Wong's Oct. 9 arraignment on the four felony charges comes months after delays because prosecutors said they were in discussions with Wong's lawyers for a “possible disposition of the case.”
The former CEO remains free on a $1 million bond secured by his home on Long Island's Valley Stream. A jury trial has not been scheduled.
Federal prosecutors allege in a court information document that Wong stole money from MCU by providing fraudulent information to get millions in reimbursements that were not covered by his employment contract.
According to a criminal complaint filed by federal prosecutors in May, Wong's alleged schemes included getting reimbursed for fake dental work; personal tax liabilities; millions in cash payments in lieu of long-term disability insurance payments and millions more for taxes to cover those payments. He also was reimbursed for fake car repair bills on one of his luxury cars leased to him by the credit union; educational, housing and living expenses for two relatives; annual cash advances; ATM withdrawals; and cash payments in place of 320 sick days he never used that allegedly violated his contract.
Wong allegedly deposited the funds from his schemes into an MCU account. He then withdrew approximately $1.9 million via ATMs over the course of more than 2,500 transactions – an average of more than one and a half transactions per day from July 2013 and January 2018.
Federal investigators also said Wong bought $3.5 million in New York lottery tickets, and he also borrowed money from two individuals to buy even more lottery tickets.
Just three weeks after the criminal complaint was filed in federal court, the NCUA board took the unusual step of banning Wong from participating in the affairs of any federally insured financial institution. Board members said they took this step so that he would no longer pose a threat to the interests of MCU members and impair public confidence in one of New York's largest credit unions.
After the MCU board fired Wong in June, the New York State Department of Financial Services removed the entire board for allegedly failing to discharge their duties and for allegedly accepting compensation, which is prohibited in the Empire State. Seven out of the 10 MCU's board have filed a special proceedings legal action in New York County Supreme Court to reclaim their board seats, arguing they were removed without due process.
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