Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced today that KAM WONG, the chief executive officer and president of the oldest New York credit union (the “Credit Union”), a non-profit financial institution, was charged in Manhattan federal court with fraud, embezzlement, and aggravated identity theft offenses related to defrauding the Credit Union in connection with hundreds of thousands of sham expense reimbursements.  WONG was arrested this morning and is scheduled to appear before U.S. Magistrate Judge James L. Cott in Manhattan federal court later today. 

U.S. Attorney Geoffrey S. Berman said:  “As alleged, 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.  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.  I want to thank my Office’s Special Agents for their dedicated efforts in this ongoing investigation.”

According to the allegations contained in the Complaint[1] unsealed today in Manhattan federal court and publicly available documents:

KAM WONG, the defendant, is the CEO and president of the Credit Union, a non-profit financial institution headquartered in New York, New York, which is federally insured.  The Credit Union is the oldest credit union in New York State and one of the oldest and largest in the country, providing bank services to more than 425,000 members, including municipal, state, and federal workers in New York City.  The Credit Union’s earnings are intended to be directed back to its members in the form of more favorable rates and fewer and lower fees for products and services.

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 (the “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 to the alleged fraud in connection with dental reimbursements, the ongoing investigation has revealed that WONG obtained numerous other payments from the Credit Union under suspicious or questionable circumstances.  These include 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; reimbursement payments for repairs to a luxury vehicle the Credit Union leased to WONG, which repair work was already covered by insurance; cash withdrawals from a Credit Union business credit card for purportedly “testing” the Credit Union’s ATMs; 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; tens of thousands of dollars in annual cash advances, for which WONG provided no supporting documentation; and payments for 320 days of purportedly unused sick leave, in violation of WONG’s contract and the Credit Union’s policies. 

WONG generally 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 account, WONG also spent at least approximately $3.55 million on New York State Lottery tickets.

In or about January 2018, after WONG learned about the investigation, WONG misled federal agents and Credit Union Board members in order to, after the fact, explain and justify some of these payments.  On or about February 22, 2018, WONG was placed on leave by the Credit Union’s Board of Directors upon the recommendation of a Special Committee overseeing an internal investigation prompted by this criminal investigation.

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WONG, 62, of Valley Stream, Long Island, is 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. 

The maximum potential sentences in these cases are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.

Mr. Berman praised the work of the Special Agents of the United States Attorney’s Office for the Southern District of New York. 

The case is being prosecuted by the Office’s Public Corruption Unit.  Assistant U.S. Attorneys Eli J. Mark and Daniel C. Richenthal are in charge of the prosecution.

The charges contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

 



[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth below constitute only allegations, and every fact described should be treated as an allegation.