How Judge Found 'Middle Ground' Sentence for Kam Wong

After hearing arguments in a packed New York courtroom Tuesday, U.S. District Court Judge John Koeltl arrived at what appeared to be a middle ground between the high-end sentence prosecutors sought and leniency from the defense attorney of Kam Wong who will spend the next five and half years in prison.

There is no word yet on when the former CEO of the Municipal Credit Union will begin his prison sentence for embezzling nearly $10 million from the New York City-based financial cooperative.

However, Judge Koeltl granted prosecutors’ request to increase Wong’s bond from $1 million to $5 million. Although Wong’s attorney, Jeffrey Lichtman, said his client is not a flight risk, he did not object to the bail increase.

The sentence was significantly less than what the judge had explained was the sentencing guidelines range of 97 to 121 months—or about eight to 11 years. Still, the sentence also included a restitution order of $9.89 million and a forfeiture order of the same amount, even as the judge commented that it was unlikely Wong, 63, would ever be able to pay off such amounts.

“We’re disappointed in the length of the sentence even though it was a third less than the bottom of the advisory sentencing guidelines in this case,” Lichtman said. “Kam’s lifetime of good deeds and impossible success story have obviously been forever tarnished by his criminal actions.  As noted by the judge, his gambling and drug addictions were a primary cause of this shocking behavior and Kam hopes to alert people to the dangers of such upon his release from prison.”

U.S. Attorney Geoffrey S. Berman for the Southern District of New York said in prepared statement that Wong’s sentence was “substantial.”

As numerous MCU employees sat shoulder to shoulder in the gallery, only yards from what appeared to be 15 or more Wong family members and friends, Lichtman squared off passionately with prosecutors Eli Mark and Daniel Richenthal.

A major point of contention—and a factor that Koeltl himself seemed to consider closely—was how much of Wong’s fraudulent and manipulative actions, which included allegedly intimidating and threatening subordinates, could be attributed to his destructive gambling and opiate addictions.

Lichtman came back to the addictions again and again, arguing that only those illnesses could explain how a hard-working man entering his 60s, who had risen to CEO after beginning at MCU in the 1980s, could have “cracked” and become a fraudster.

But for Southern District prosecutor Mark, the addictions could not mask what actually lay at the heart of Wong’s fraud—a betrayal that has left MCU members and employees cheated and let down—and that was greed.

From 2013 to January 2018, Wong—who Lichtman said had come from “crippling poverty” in Hong Kong and risen to become a figure revered throughout New York’s Chinese-American community—stole millions of dollars in MCU funds. His methods, it was charged, included fooling the credit union into paying him several million in lieu of purported long-term disability insurance, as well as submitting sham invoices for dental work never performed on him or paid by him. He also created fake paperwork for taxes owed on employment benefits and reaped fraudulent funds that way, court documents say. In addition, prosecutors have said that, once he was approached by investigators in 2018, he repeatedly found ways to obstruct their inquiry.

But Lichtman said that, while Wong’s actions were “atrocious,” he wasn’t a “con man.” Rather, insisted the attorney, he was someone who had melted down after “decades of incredible stress” brought on by a life focused only on taking care of his family and working nonstop—15 hours a day, six days a week—at his job.

Suddenly, Wong went from buying low-amount lottery tickets to spending $60,000 a month on lottery games, Lichtman told the courtroom. As he spun out of control, he also borrowed money from his subordinates to feed his addiction.

Eventually, Wong spent $5.5 million on lottery tickets, Lichtman said, deepening his voice to emphasize the amount. In addition, Lichtman has told Koeltl that, eventually, Wong was consuming a daily cocktail of opiates, popping hydrocodone pills while swigging from a codeine-laced bottle of syrup at his desk.

Mark, rising from his seat to address the judge, countered sharply.

“He wasn’t a junkie,” Mark said. “He was calculated.”

“Defendant was fraudulent, he was deceptive, he was dishonest,” Mark added, loudly.

Plus, Wong had “created a culture of subservience at the credit union,” he said.

Then, he recounted how Wong would force employees to drop whatever daily work they were doing, so they could hurry up and bring to him handwritten checks for $20,000, $30,000 or more.

After hearing the arguments—and from Wong himself, who told the judge before crying that “there’s no excuse for what I did, only pain and regret”—Koeltl arrived at what appeared to be a middle ground for Wong’s sentence.

“The defendant’s gambling addiction was surely a factor in the offense,” the judge told the courtroom, which sat rapt and silent.

He also said. “Defendant has betrayed all of his dreams” and “he will lose the fruits of his entire life.”

Then, in settling on 5½ years in prison and many millions in restitution and forfeiture, the judge said “the mitigating factors do not erase” the crime.

Wong “plainly abused the credit union,” Koeltl said grimly. He stole from its members, the judge said, to the “great detriment” of “people who needed the money.”