Kam Wong, 62, the chief executive officer and president of the $2.9 billion Municipal Credit Union of New York City, was charged in a Manhattan federal court with fraud, embezzlement, and aggravated identity theft offenses related to defrauding the credit union in connection with numerous sham expense reimbursements.
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, said Wong was arrested Tuesday morning and was scheduled to appear before U.S. Magistrate Judge James L. Cott.
Wong has specifically been charged with one count of embezzlement from a federally insured credit union, one count of bank fraud, one count of wire fraud, each of which carries a maximum penalty of 30 years in prison, and one count of aggravated identify theft, which carries a mandatory two-year consecutive term in prison.
According to court documents, from at least 2013 through January 2018, Wong engaged in a “long-running multi-faceted scheme” to obtain money from the credit union to which he was not entitled, and took steps to seek to conceal what he had done.
Among other things, Wong allegedly embezzled from and defrauded the credit union by submitting sham invoices for dental work never performed on him or paid by him, and, as a result, obtained reimbursement for hundreds of thousands of dollars of such nonexistent dental work, as well as for his alleged personal tax liability for these and other payments or benefits.
In addition, Wong obtained other payments from the credit union under “suspicious or questionable” circumstances, including millions of dollars in cash payments in lieu of a long-term disability insurance policy, as well as millions more for taxes to cover those payments and reimbursement payments for repairs to a luxury vehicle the credit union leased to Wong.
He allegedly also made cash withdrawals from a credit union business credit card for purportedly “testing” the credit union’s ATMs; to fund “substantial” educational, housing, and living expenses for two of Wong’s friend’s relatives, whom the credit union hired at his direction to be interns. Wong further obtained tens of thousands of dollars in annual cash advances, for which he provided no supporting documentation; and received payments for 320 days of purportedly unused sick leave, in violation of his contract and the Credit Union’s policies.
Wong typically deposited the proceeds of his scheme into a credit union account, from which, between July 2013 and January 2018, he then withdrew approximately $1.9 million from ATMs, over the course of more than 2,500 transactions, an average of more than one-and-a-half transactions per day.
From this same account, Wong spent at least approximately $3.55 million on New York State Lottery tickets.
The court noted that Wong became aware of the investigation in or around January 2018. Thereafter, he misled federal agents and credit union board members in order to ”explain and justify” some of these payments. On or about February 22, 2018, Wong was placed on leave by the MCU board of directors.
“The CEO and president of New York’s oldest credit union abused his position of trust as a guardian of municipal, state, and federal workers’ financial accounts to enrich himself,” said Berman. “Kam Wong allegedly stole money from the credit union’s earnings that were intended to reward the credit union’s members, not line Wong’s pockets.”
In response to Wong’s arrest, MCU’s acting president and chief executive officer, Norman Kohn, stated to membership: “I want to assure you that the board and the management team continues to be committed to the important work we do for you day in and day out. MCU is as strong as it has ever been and we will continue to provide you, our valued members, with the committed and outstanding service you expect, and deserve, from us.”
The credit union stated that the charges against Wong are “deeply upsetting.” MCU further said it was “aware” of the investigation and has been cooperating with the U.S. Attorney’s office.
“The credit union has alerted all relevant regulatory agencies and has been conducting its own internal investigation led by outside counsel,” MCU added. “The credit union is not under investigation. We want to assure our members that MCU remains financially strong and committed to their needs.”
MCU serves more than 425,000 members, including law enforcement, municipal, state, and federal workers in New York City.