Judge Sentences Kam Wong to More Than 5 Years in Prison

A federal judge on Tuesday sentenced former Municipal Credit Union CEO Kam Wong to five and a half years in prison for embezzling nearly $10 million from New York City’s largest and oldest financial cooperative.

U.S. District Court Judge John G. Koeltl in Manhattan also ordered Wong to pay $9,890,375 million in restitution and serve three years of supervised release after his prison term ends.

Prosecutors asked the judge to give Wong a six to 10-year prison sentence because the former executive’s abuse was so rampant that the $3 billion MCU continues to work “to uncover and unwind the damage he wrought.”

Even though Wong agreed in a plea deal last year to forfeit his assets, which included several luxury cars and millions of dollars in multiple bank or securities accounts and no liabilities, recently filed court documents showed that Wong took no steps to arrange for payment toward his obligations.

“To the contrary, the defendant, who previously appeared to seek to conceal certain assets, neither offered nor made any payments, over multiple months, requiring the government to investigate further and document his assets and then seek and obtain multiple orders from this court,” federal prosecutors wrote in a May 29th letter to Judge Koeltl.

Defense attorney Jeffrey H. Lichtman pleaded for leniency, saying Wong cracked under the pressures and mental stresses from managing MCU through 9/11, Hurricane Sandy and the Great Recession. The gambling addiction and drug use somehow worked as a coping mechanism to deal with his workplace stresses, Lichtman argued in court documents. Wong spent $5.5 million on New York lottery tickets and consumed a daily cocktail of what Lichtman described as judgement-suppressing opiates, popping hydrocodone pills, which the former CEO swallowed sipping from a bottle of codeine-laced syrup at his desk.

Wong received those illegal drugs from an unidentified supervisory board member in exchange for funneling hundreds of thousands of dollars to that committee members’ company in violation of the credit union’s conflict of interest policy, according to federal prosecutors.

Former MCU administrator Stella M. Mendes, who was appointed to oversee the general management of the credit union by state regulators after Wong was fired last year, wrote in a letter to the judge that she discovered that employees were expected to follow the former CEO’s demands without question or risk being fired.

Under Wong’s façade of benevolence and selflessness was calculated manipulation intentionally designed to shield employees from questioning his criminal actions, intentions, and flawed policies, according to characterizations from statements in court documents.

“Indeed, the defendant also set a tone at the top that failed to value compliance, ethics and morals, and instead rewarded those who traded favors, kept their heads down and did not raise concerns about his conduct or any other irregularities,” she wrote to Judge Koeltl.

Mendes also noted that she was shocked by the number of employees who became visibly shaken when asked about some of the activity that occurred during Wong’s tenure.

From about 2009 to 2018, court documents show he stole millions of dollars from the credit union through various fraudulent schemes, lived a lavish lifestyle by driving luxury cars, ate at high-end restaurants, paid for five-star hotel rooms and spent $5.5 million on New York lottery tickets.

Wong’s schemes included reimbursements for fake dental work; $7.7 million in cash payments in lieu for long-term disability insurance, which he was not entitled to because his employment contract provided him with long-term disability insurance and nearly $2 million in fake tax reimbursement payments; bogus repair bills for  luxury cars leased to him by the credit union; educational, housing and living expenses for relatives; tens of thousands of annual cash advances, and nearly $2 million in ATM withdrawals and hundreds of thousands in cash payments in place of 320 sick days that Wong was not entitled to under his employment contract, according to court documents.