Federal Judge Denies Municipal Credit Union’s Request for Restitution
Credit union sought to recover legal and investigative expenses in connection to its former board chair’s crimes.
A New York federal judge denied a request by the $4.2 billion Municipal Credit Union for restitution to recover its legal and investigative costs involving its former board chair Sylvia Ash, who was convicted of obstruction of justice and making false statements to federal officers.
The credit union asked U.S. District Court Judge Lewis A. Kaplan of the Southern District of New York for restitution because Ash’s criminal conduct caused additional legal and investigative costs for MCU to determine whether former CEO Kam Wong had embezzled from the credit union and continued to pay Wong’s salary after the obstruction scheme began until Wong was fired.
Court testimony and evidence proved that Ash, a former state judge who was on MCU’s board from 2008 to 2016, deleted and hid evidence from a federal grand jury and repeatedly lied to federal agents to protect herself and Wong, who was at the center of a multimillion-dollar fraud and corruption investigation in 2018. He pleaded guilty to embezzling nearly $10 million and was sentenced to five and a half years in prison in 2019.
Federal prosecutors supported MCU’s request for restitution under the Victim and Witness Protection Act of 1982, which provides judges with the discretion to award restitution for victims who have been harmed by a criminal offense.
In his July 21 memorandum and order, however, Judge Kaplan said he doubted the New York-based MCU qualified for restitution as a victim under the VWPA Act.
“First, it is not immediately apparent that any of the offenses of which Ms. Ash was convicted is susceptible to identifying individual victims,” Judge Kaplan’s order read in part. “Courts widely have held that obstruction crimes, as a general matter, are akin to immigration offenses in the sense that the victim is society at large.”
He also concluded that the “connection between the offense conduct (of Ash) and MCU’s alleged losses is too attenuated to favor an exercise of discretion to award restitution in this case.”
MCU did not respond to CU Times‘ request for comment.
Kaplan sentenced Ash to 15 months in prison in April and ordered her to pay an $80,000 fine.
According to prosecutors, Ash owns $2.2 million in assets and her net worth is $2 million. And while the criminal case was pending over two years, she collected more than $210,000 annually, which was her salary as a state judge. She resigned from her post in March.
Ash is appealing her conviction and sentence, but Kaplan denied her request to remain free on bond. She recently began serving her sentence at a federal minimum-security prison in Alderson, W. Va., according to the Federal Bureau of Prisons.