Ex-NYPD Officer Sentenced to 27 Months for Embezzling From Municipal Credit Union

A Manhattan federal judge on Thursday sentenced former New York City Police officer Joseph Guagliardo to 27 months in prison for conspiring to embezzle hundreds of thousands of dollars from New York’s oldest credit union.

Guagliardo, who served on Municipal Credit Union’s advisory board, was accused last October of diverting the funds to a private security company and a nonprofit organization that were both under his control. He has also admitted to supplying the credit union’s former CEO, Kam Wong, with illegal painkillers, and pleaded guilty to one count of embezzlement earlier this year.

The wrongdoing was related to a criminal corruption probe of MCU and Wong, who is currently serving a five-and-a-half-year sentence for defrauding MCU out of nearly $10 million. The investigation also led to the arrest of Sylvia Ash, a Brooklyn state Supreme Court judge charged with trying to cover up Wong’s crimes and then lying to authorities.

Ash, who has been suspended from the bench, has pleaded not guilty to the charges.

Guagliardo’s sentence, handed down by U.S. District Judge Denise Cote of the Southern District of New York, was in line with the prosecutor’s request that he serve time at the low end of the federal guidelines. His attorney, Joseph Arlia, had asked for a nonjail sentence, citing his client’s age and law enforcement background as reasons to keep him out of jail.

Guagliardo, 63, had suffered from prostate cancer and other conditions that made him particularly vulnerable to complications from COVID-19, if he were to contract the disease in prison, Arlia said during the remote sentencing, which was held via the court’s Skype for Business platform.

Guagliardo, who appeared on camera wearing a mask and gloves, said that he was “ashamed, humiliated and broken” for having damaged MCU, the state-chartered credit union that he credited with “saving my life” after he was disabled and forced to retire from the police force in 1993.

MCU has said that it lost at least $1.1 million as a result of Guagliardo’s conduct and has been placed under convervatorship as a result of the multiple scandals.

Addressing the court during Thursday’s sentencing, Stella Mendez, the credit union’s former administrator, painted Guagliardo as a “bully,” who used his connections with law enforcement to “exploit” MCU for his own gain.

“He treated the credit union like his own fiefdom,” Mendez said in brief remarks to the court.

Arlia argued that Guagliardo was a victim of Wong’s temptations, saying that the former CEO had tried to compromise members of MCU’s board in order to facilitate his own crimes. Arlia also denied allegations of bullying and that his client had conspired with Wong to defraud the credit union.

Still, Arlia said, Wong had taken “orchestrated, carefully measured” steps to “tempt” those around him.

“Even a state Supreme Court judge fell prey to this,” he said.

Cote, however, responded that, “I am not sentencing Mr. Wong. He has been sentenced and was sentenced by another judge.”

Cote noted that Thursday’s sentencing was the first time she had seen Guagliardo express remorse for his actions at MCU, and said she found it hard to believe Wong had “led the defendant astray” by offering him incentives to break the law.

“This was not negligent conduct by Mr. Guagliardo. This was a decision on Mr. Guagliardo’s part,” she said. “He took full advantage of the lack of oversight at MCU and [deprived] its members of hundreds of thousands of dollars.”

Cote ordered Guagliardo to report to prison by Sept. 4 and to pay $468,000 in restitution to MCU within the next three weeks.