Former MCU CEO Kam Wong Released From Prison

Kam Wong, the disgraced and convicted CEO of New York’s Municipal Credit Union, was released from federal prison on Monday, according to the Federal Bureau of Prisons.

Wong, 67, embezzled nearly $10 million from MCU, which exposed its internal rampant fraud and corruption that led to the imprisonment of a former board chair and a supervisory committee member.

Although the former CEO was sentenced to five years and six months, beginning his prison term in August 2019, he served only three years and nine months because of the First Step Act (FSA), enacted by Congress in 2018. The federal prison reform law enables non-violent and white-collar criminals to reduce their original sentences through good conduct and when they successfully complete evidence-based recidivism reducing programs and productive activities such as vocational training, educational classes and behavioral therapy.

“Kam Wong was released from the Bureau of Prisons (BOP) custody on May 1, 2023, via First Step Act (FSA) release,” Scott Taylor of the public affairs office for the BOP in Washington, D.C. said. “While we don’t discuss a specific inmate’s release method, we can share that an inmate may earn good conduct time. Under the amendments made by the FSA, qualifying inmates will be eligible to earn up to 54 days of good conduct time for each year of the sentence imposed by the court. Additionally, inmates may (be) release(d) up to 12 months early if they complete the BOP’s Residential Drug Abuse Program (RDAP), and inmates may (be) release(d) early via court order such as a compassionate release (due to old age and medical conditions) or clemency.”

Wong’s lawyer, Jeffrey Lichtman in New York, said his client is in “good shape” and is “acclimating to life at home with his family.”

Wong’s sentence also required him to complete three years of supervised release and to pay $9,890,375 in restitution. Filings with the U.S. District Court for the Southern District of New York in Manhattan showed he has paid $2,081,603 in restitution generated from Wong’s assets (bank accounts, cars, real estate) that were seized by federal authorities following his sentencing hearing.

Criminal and civil court actions that followed the May 2019 conservatorship of MCU revealed details and allegations of the credit union’s widespread fraud and corruption that led to more than $18 million in financial losses and $109 million in write-down losses.

Joseph Guagliardo, a former MCU supervisory committee member who embezzled more than $468,000, was sentenced in July 2020 to 27 months in prison. However, after the retired New York City police officer and certified fraud investigator began his federal prison sentence in September 2020, he was released on Jan. 13, 2022, according to the Federal Bureau of Prisons. He served 16 months of his 27-month prison sentence because of FSA.

In addition, former MCU Board Chair Sylvia Ash was found guilty of obstructing justice and other crimes by a New York jury in December 2021. Prosecutors said the case was about a cover-up because Ash, a former New York state judge, deleted and hid evidence from a federal grand jury that was investigating the MCU case. She received a 15-month sentence in April 2022 and reported to prison in July. Ash, who was disbarred, is scheduled to be released on June 20, according to the Federal Bureau of Prisons.

What’s more, civil court filings revealed that five other former top executives at MCU, another supervisory committee member and a dozen former board members were allegedly involved in numerous “dishonest acts” that led to losses of more than $4 million.

In February 2022, federal and state regulators released MCU from conservatorship.

Although the credit union posted a net income loss of $82.7 million in 2019 when it was conserved; since that time, MCU has recorded positive growth in assets, loans, members and net income. In 2019, its net worth was 4.74% with a ROAA of -2.80%. At the end of this year’s first quarter, MCU posted a net worth of 9.14% with a ROAA of 1.87%, according to NCUA financial performance reports.