NEW YORK–One person close to the massive fraud committed by Kam Wong, the former CEO at Municipal Credit Union, is alleging the wrongdoing may have involved more than just one person, due to its length and scope.
As CUToday.info reported, Wong was charged with embezzling nearly $10 million from the credit union by the U.S. Attorney’s Office for the Southern District of New York, and has since entered a guilty plea. According to prosecutors, Wong, 62, allegedly used $3 million of the money to buy New York State lottery tickets.
The U.S. Attorney has charged Wong with embezzling from the credit union by submitting false invoices for dental work and other expenses. Wong allegedly also "obtained numerous other payments from the credit union under suspicious or questionable circumstances" from at least 2013 through January 2018, according to a released statement from U.S. Attorney Geoffrey Berm. He is scheduled to be sentenced in April and has already been ordered to pay $9.8-million in restitution.
TheChiefLeader.com has reported that the credit union’s longtime general counsel, Thomas Siciliano, has departed the credit union and has been replaced by an outside law firm.
Directors File Suit
Members of the credit union’s supervisory committee and board of directors were all dismissed by regulators in the wake of the discovery of the embezzlement, and seven members of the board have since filed suit in Manhattan Supreme Court.
The directors’ suit alleges they were dismissed without required due process, which includes an administrative hearing to defend themselves against the allegations that were leveled by state regulators, TheChiefLeader.com reported. “(The suit) maintained their firing came just as the board was making progress in its own internal investigation that started 13 months ago when it was served with Federal subpoenas in the Wong case,” the publication added.
“While there was no reference to a criminal conspiracy in Mr. Wong’s plea agreement, in several places in the filings describing his criminal actions, prosecutors referred to him ‘agreeing with one or more others to engage’ in the actions to which he pled guilty,” TheChiefLeader.com reported.
Conflict of Interest?
In addition, the plea agreement states Wong had made “donations to charitable organizations in violation of the credit union’s conflict of interest policy” and that he had been in “possession and purchased from a former Credit Union Supervisory Committee member and his spouse a controlled substance for personal use,” TheChiefLeader.com reported.
According to TheChiefLeader.com, a former member of the board who is in a plaintiff in the lawsuit sent a statement to the publication that stated, “The recent termination of a high-level officer should be an indication of how pervasive the fraud was. Those responsible for reporting to the board failed to do so and in effect the fraud was hidden from us.”
Municipal CU has since named Mark A. Ricca as its new president/CEO.