Former Municipal Credit Union Supervisory Member Faces April Sentencing

Former supervisory committee member Joseph Guagliardo, of the $2.9 billion Municipal Credit Union, will be sentenced in April after he pleaded guilty to embezzling more than $400,000 from the New York City-based financial cooperative, U.S. Attorney Geoffrey S. Berman for the Southern District of New York said Friday.

In a prepared statement, Berman hinted there may be charges filed against others after a 2018 federal investigation revealed massive fraud and corruption at New York City’s oldest credit union that has so far led to the conviction of its former CEO, Guagliardo’s guilty plea and criminal charges against a former MCU board chair.

“As he has now admitted, Joseph Guagliardo betrayed the trust of MCU’s members, who elected him to supervise and protect MCU, by abusing his position to steal hundreds of thousands of dollars,” he said. “Today’s plea is yet another step forward in this office’s efforts to fully investigate and prosecute those who abused positions of authority at MCU, a multibillion-dollar, non-profit, federally insured credit union, to enrich themselves and their families at the expense of its hard-working members.”

According to an information document made available publicly by federal prosecutors, the 62-year-old Guagliardo was formally charged with one count of embezzlement from a credit union. However, that court document does not formally charge the retired New York City cop with conspiracy to embezzle from a credit union, conspiracy to defraud a financial institution, conspiracy to distribute controlled substances and distribution of controlled substances. Those allegations were originally made in a criminal complaint filed by federal prosecutors in October.

Although federal prosecutors indicated Guagliardo signed a plea agreement to forfeit $425,514 and to pay $469,189 in restitution to MCU, the plea agreement was not publicly available Friday. Presumably, federal prosecutors agreed to drop the other criminal charges against Guagliardo in exchange for his guilty plea.

In the criminal complaint, Guagliardo allegedly supplied prescription drugs to former MCU President/CEO Kam Wong. The drugs were allegedly obtained from Guagliardo’s spouse, who worked as a doctor affiliated with a public hospital and from a different doctor affiliated with the NYPD.

Wong is serving a five-and-a-half year prison sentence for embezzling nearly $10 million from MCU. Wong was ordered to pay $9,890,375 in restitution and serve three years of supervised release after his prison term ends.

Guagliardo admitted in U.S. District Court in Manhattan on Friday that from 2009 through May 2018 he steered more than $250,000 from MCU to a security company that he created and controlled but was operated by another individual. He then directed those from funds his company be paid to him and family members. The retired New York City cop also over-billed MCU more than $200,000 for purported web advertising services provided by a non-profit organization that Guagliardo also controlled, federal prosecutors said.

Guagliardo joined MCU’s supervisory committee in 1993 and was removed in May 2018 when the New York Department of Financial Services placed the credit union into conservatorship. For a brief time, he also served as a MCU board member in 2008, federal prosecutors said.

Guagliardo faces a maximum penalty of 30 years in prison.

Sylvia Ash, a judge of the Kings County Supreme Court and former MCU board chair, is also facing multiple criminal charges. She pleaded not guilty in November to conspiracy to obstruction of justice for falsifying records and obstruction of justice to tampering with a witness, victim or informant connected to a federal investigation.

These charges stem from an alleged scheme to influence and impede a federal investigation into fraud and corruption at the credit union.

Ash’s jury trial is scheduled for May.