Guilty Verdict for Former Municipal Credit Union Board Chair Sylvia Ash

Former Municipal Credit Union Board Chair Sylvia Ash was found guilty of obstructing justice and other crimes by a New York jury on Monday.

Prosecutors said the case was about a cover-up because Ash deleted and hid evidence from a federal grand jury that was investigating a multimillion-dollar fraud and corruption case at New York’s oldest financial cooperative.

The jury found the Brooklyn state Supreme Court Justice guilty on two felony counts of obstruction of justice, one felony count of conspiracy to obstruct justice and one felony count of making false statements to federal officers, Damian Williams, United States attorney for the Southern District of New York said.

“Today’s conviction demonstrates our resolve in uncovering criminal conduct at the highest levels of MCU and ensuring that those who attempt to thwart a federal investigation face consequences for that corrosive conduct,” Williams said in a prepared statement. “As the jury unanimously found, Sylvia Ash took repeated steps, over multiple months, to seek to obstruct the federal criminal investigation into financial misconduct at MCU that took place during Ash’s tenure as chair of the board of directors. Obstruction of justice, particularly by a sitting state court judge, is a serious crime, and Ash now faces punishment for her obstruction scheme.”

Ash, who was convicted after two weeks of testimony and evidence, is scheduled to be sentenced on April 20, 2022.

In early 2018, Kam Wong, MCU’s former president/CEO, had become the focus of an investigation for a multimillion-dollar embezzlement. He pleaded guilty to stealing nearly $10 million and was sentenced to five and a half years in prison in 2019.

Prosecutors said Wong needed a cover story for federal investigators who were questioning him in 2018 when he turned to Ash to help sell his cover story to federal agents.

When federal investigators pressed Wong about the millions he had taken from MCU, he wrote a memo. That memo claimed in 2015, Ash, while serving as MCU’s board chair, had told Wong that it was okay to take millions of dollars – that he was permitted to take cash from MCU instead of an insurance policy.

Wong asked Ash to sign this phony memo, and after she did, Wong gave it to federal investigators, claiming it proved his innocence. When federal investigators confronted Ash with her signature on the memo, she confessed that she knew the memo wasn’t true. The federal investigation continued, federal prosecutors said.

Ash’s defense attorney, Carrie H. Cohen, however, claimed her client never lied to the government, and never deleted emails or withheld text messages to frustrate the federal investigation.

Cohen said Ash, who trusted Wong, was duped by him and used her to cover up his crimes.

Prosecutors pointed out, however, that while Wong was embezzling millions, he made sure that Ash got plenty of perks and reimbursements for any expense she submitted.

While Ash served on the MCU board, she got tens and thousands of dollars of perks, flying around the world for conferences, all expenses paid to the Greek Islands, England and the Caribbean. MCU also reimbursed her personal internet, cable and phone bill. Wong gave her the latest Apple devices, and, whenever she asked, tickets to all the sports games, even prime seats at the U.S. Open. Ash also regularly used the MCU suite at a baseball stadium to host her birthday parties, billing all the food and alcohol to MCU.

Although these perks and benefits did not necessarily violate MCU policy, Ash was required to report gifts and outside income to the state every year because she was serving as a New York judge. But Ash allegedly never reported those MCU gifts and income to the state.

What’s more, prosecutors said Ash shouldn’t have even been serving on the MCU board because it was a conflict of interest with her position as a judge. When a state ethics committee found out, they told her to resign from the board. But she didn’t. She stayed on until an ethics complaint was filed against her. Only then did she resign, in 2016. Ash began serving on the MCU board in May 2008.

Even when Ash was no longer on the MCU board, the perks continued, whether it was an all-expense-paid trip to Las Vegas or more parties at MCU’s suite at the stadium, according to prosecutors.

Ash is a sitting New York State Supreme Court Justice in Kings County and has served as a judge in the New York State court system since approximately 2006, first as a Kings County Civil Court Judge, and then, starting in 2011, as a Kings County Supreme Court Justice, according to prosecutors. In January 2016, Ash was appointed as the presiding judge in the Kings County Supreme Court’s Commercial Division. After the charges in this case were unsealed, she was suspended from her position.

The MCU case revealed allegations of rampant fraud and corruption that not only involved Wong, but at least five top executives, two supervisory committee members and 13 former board members, which led to more than $18 million in financial losses and $109 million in write-down losses, according to civil lawsuit court documents. Because of these losses, MCU has remained under the NCUA’s conservatorship since May 2019.

Former Supervisory Committee Chair and head of the MCU Fraud and Security Department Joseph Guagliardo, who is also a retired New York City police officer and a certified fraud examiner, was sentenced to 27 months in federal prison last July after he pleaded guilty to embezzling more than $400,000 from the credit union.

He had been serving his sentence at a minimum-security prison at Fort Dix, N.J., but he is now at a halfway house in Brooklyn, according to the Federal Bureau of Prisons. His release date is in August 2022.