CEO who plundered massive city credit union pleads for mercy – Crain’s New York Business

Federal prosecutors want former Municipal Credit Union Chief Executive Kam Wong to serve up to a decade in prison—roughly a year for every million dollars he admitted to stealing from his institution.

“It is difficult to overstate the damage that the defendant caused—damage so severe that the credit union was recently placed into receivership,” the prosecutors wrote in a May 20 sentencing memo.

State regulators seized Municipal Credit Union, the city’s largest credit union, on May 17 and handed control to the National Credit Union Administration. The plundered institution has some 588,000 members, many of them public-sector employees.

Wong’s attorneys seek leniency for their 63-year-old client. They describe the fallen executive as “a walking testament to human frailty and the dangers of unchecked addiction” in their own memo to U.S. District Judge John Koeltl, who is to sentence Wong June 4. They attributed his crimes to a gambling addiction.

“While Mr. Wong must be punished further, the imposition of a lengthy sentence at this point will not meaningfully advance the ends of sentencing,” his attorneys said.

Wong was a great New York story in 2007, when he became CEO of Municipal Credit Union, a nonprofit founded in 1916 that serves police officers, teachers, firefighters, nurses, home health aides and others. Wong joined MCU in 1981, six years after moving from Hong Kong at age 19 and soon after getting his bachelor’s degree in accounting from Baruch College.

But in May 2018, prosecutors charged Wong with fraud and embezzlement, alleging he billed the credit union $280,000 for dental work that was never performed, submitted sham invoices for $25,000 worth of car repairs that were covered by insurance and withdrew $8,000 from credit union ATMs, which Wong said was for the purpose of “testing” them. He also billed MCU more than $100,000 to cover the rent, education and living expenses of two interns who did little or no work and stole $7.7 million from the credit union for the purpose of buying disability insurance that was never purchased. When federal investigators started looking around, Wong lied to them and told others to lie.

Wong pleaded guilty to embezzlement in November. In their memo to the judge, his attorneys say Wong started buying lottery tickets here and there to help cope with post-9/11 stress, and by the time he became MCU’s CEO, he was buying $100 worth of Win4 tickets every day. The financial crisis and Superstorm Sandy worsened his stress, and between 2013 and 2017 he stole $4.5 million from MCU to buy lottery tickets. A crooked member of MCU’s supervisory committee helped keep the credit union in the dark, while Wong soothed his conscience by popping hydrocodone pills and sipping from a bottle of codeine-laced syrup at his desk.

Wong’s attorneys hope Koeltl will be swayed by the dozens of letters submitted by family members and friends depicting a loving father, husband and friend whose life went awry.

“Over the course of my life … there has been only one true role model that I aspired to become one day, and that person was my father,” wrote his son, Edward Wong. His sister, Virginia Chiu, wrote, “I pray that you will consider the man Kam was and give him a chance to be that person for his family again.”

MCU painted a different picture.

“He focused on how he could enrich himself, his family and those employees who were in his inner circle. Simply put, the defendant ran the credit union like his own kingdom and abused his position of trust,” MCU said in a statement cited in the prosecutors’ memo.

Last year state regulators fired MCU’s supervisory committee and its board of directors, citing “severe deficiencies” in oversight.

Prosecutors added that Wong doesn’t even appear to have worked all that hard running MCU. They said a review of his internet history shows he spent “hours each day” online engaging in social media, watching Hulu and YouTube, researching Hong Kong real estate and building his car—a custom Bentley.

“The defendant repeatedly abused his role as the head of a nonprofit credit union,” prosecutors wrote. “He did so for years.”