Longtime Head of MCU Charged With Stealing Millions From Coffers (Free Article)

The CEO and president of the Municipal Credit Union, which serves hundreds of thousands of public employees and their families, has been arrested on Federal fraud and embezzlement charges connected to his misuse of millions of dollars in MCU funds.

Kam Wong, 62, was arrested and arraigned May 8 before U.S. District Judge James L. Cott and released on a $1 million bond secured by his home in Valley Stream, L.l., according to his attorney, Jeffrey Lichtman.

12 Years as President

Mr. Wong had been with the MCU since 1981 and was made president in 2006 and then given the CEO’s job in 2007.

The charging documents indicate Mr. Wong was obsessed with the New York State Lottery, writing checks for $3.3 million at two convenience stores primarily for lottery tickets. At one store located in Elmont near his home, investigators said he spent hours at a time during weekends playing the lottery.

From July 2013 through January 2018 Mr. Wong made 2,592 ATM withdrawals totaling $1.9 million, sometimes involving multiple transactions in a day, according to an affidavit filed by the lead Special FBI agent handling the case.

Quietly Placed On Leave

Mr. Lichtman said his client was notified in January about the Federal probe, which prompted an internal investigation by the MCU and resulted in Mr. Wong being placed on paid administrative leave on Feb. 22. His attorney said that his client had been making an effort to cooperate with prosecutors for months.

He told reporters after the arraignment that Mr. Wong was “devastated” by the charges and that he had spent his entire professional life at the MCU and was proud of helping the non-profit continue to grow despite major challenges.

Mr. Lichtman said, “He brought the credit union record profits despite major ordeals like the Great Recession and Super-Storm Sandy. It’s just hard to believe these charges, because everything was done transparently and openly with the full support of the board of directors.”

How They Operate

Credit unions are run as non-profit banking institutions that are owned cooperatively by depositors who vote for other members to serve as volunteers on the Board of Directors and Supervisory Committee that oversee the MCU’s operations. Members’ savings accounts are federally insured up to $250,000, and IRA accounts are separately insured for up to $250,000 by the National Credit Union Administration, according to the MCU.

The organization, which was founded in 1916 to help city employees who otherwise might have been forced to borrow from payday lenders, currently holds $2.68 billion in assets, according to its annual report.

In a statement on the MCU website, Norman Kohn,the group’s acting president and CEO, said it was “not under investigation” and that it was working with “all relevant regulatory agencies and has been conducting its own internal investigation led by outside counsel...We want to assure our members that MCU remains financially strong and committed to their needs.”

According to documents filed with the court, Mr. Wong requested and got $3.6 million from the credit union paid to him personally in lieu of its providing him with long-term disability insurance, as well as $3.1 million to cover his taxes on the purported disability payout.

Between July and September of 2013, “on numerous occasions” he made $500 cash withdrawals using an ATM he had been given for business expenses. When challenged by the MCU’s accounting department, Mr. Wong said “he was just testing” the ATMs and promised to pay back the $8,000 he had withdrawn that summer, according to prosecutors.

Obvious Red Flags

He also directed credit-union employees to pay $100,000 in living expenses, visa and tuition costs for two young relatives of a family friend of Mr. Wong's in Hong Kong.

In addition to these “numerous other payments made under suspicious or questionable circumstances,” he is alleged to have generated hundreds of thousands of dollars for himself by submitting phony dental-work invoices, the government alleged.

Mr. Wong also had the credit union lease him “multiple high-end luxury vehicles including a Mercedes Benz, a Maserati, a Gran Turismo and a Ferrari California T, according to prosecutors.

In January of this year, Federal agents contacted the credit union about the ongoing probe. Prosecutors allege that when Mr. Wong learned about the investigation, he attempted to “mislead Federal agents and Credit Union Board members in order to, after the fact, explain and justify some of these payments.”

While the court filings listed Mr. Wong’s annual salary as $684,137, the MCU’s 990 IRS form for 2016—available through GuideStar, the non-profit rating agency—listed his compensation as $5.88 million, with an additional $116,105 listed as “other.” On that same form, four other credit-union executives were listed as making in excess of $600,000 annually.

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