Feds Allege Former CU CEO Moved Nearly $700,000 to Avoid Government Seizure

Federal prosecutors alleged former Municipal Credit Union CEO Kam Wong, who is awaiting sentencing for stealing nearly $10 million, allegedly “dissipated assets” of nearly $700,000 to avoid the government’s seizure of those funds.

Wong’s attorney, however, said Friday this allegation is false.

According to court documents filed by federal investigators last week, Wong transferred funds from two Citibank accounts to two TD Bank accounts under his wife’s name after a criminal complaint and his arrest in May. Before the complaint was filed and before he was arrested, the Citibank accounts were jointly held by Wong and his wife, making the TD Bank accounts subject to criminal forfeiture, according to court documents. A criminal forfeiture allows the federal government to seize the assets of any person involved in criminal activity.

“His bank account he shared with his wife was closed by the bank due to his arrest and he simply opened up a new account in his wife’s name in order to prevent another closure of the account,” Jeffrey Lichtman said, a New York lawyer who represents Wong.

Court documents do not say that the accounts were closed by the bank and they show the funds were not transferred until July or August of last year.

Federal investigators alleged that Wong, after the criminal complaint against him and his arrest in May, “purposely dissipated assets presumably to avoid an anticipated criminal forfeiture order,” and moved the $682,899 in funds from Citibank to TD Bank in accounts under his wife’s name.

The feds are also going after two life insurance policies held by the $2.8 billion MCU on behalf of Wong. The value of those polices have not been revealed in court documents.

Wong pleaded guilty in November to embezzling nearly $10 million from the $2.8 billion Municipal Credit Union where he was president/CEO from 2007 to June 2018. He joined MCU in 1981 and became its CFO 1988.

Prosecutors filed forfeiture documents in U.S. District Court in Manhattan in February that will allow the federal government to take possession of Wong’s assets to help pay the $9,890,375 he will be ordered to make in restitution during his sentencing hearing in May.

According to federal investigators, Wong’s assets are valued at $2,266,136.

Those assets include 24 accounts with JP Morgan Chase, Citibank, Bank of America, Wells Fargo Advisors, HSBC, and Sterling National Bank, a 401(k) account, seven luxury cars, his suburban home on Long Island’s Valley Stream and a Brooklyn apartment.

From 2014 to 2016 he received $11,169,457 in W-2 compensation, which included his base salary, bonus and incentive pay and other reportable compensation, according to MCU’s 990 filings with the IRS. The former executive also received more than $114,000 in non-taxable benefits and more than $281,000 in retirement and deferred compensation, the credit union’s 990 IRS filings show.

The former CEO stole from MCU by submitting sham invoices for dental work never performed on him or paid by him and millions of dollars in payments made by the credit union in lieu of purported long-term disability insurance, and for taxes owed on these and other employment benefits, according to court documents. He also received cash advances he was not entitled to, payments for his leave days that did not comply with and exceeded what was provided for under his employment contract, prosecutors said.