Brooklyn Supreme Court judge convicted of obstructing federal investigation into municipal credit union misconduct | USAO-SDNY

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Damian Williams, United States Attorney for the Southern District of New York, today announced the conviction of SYLVIA ASH, a judge of the New York State Supreme Court and former chair of the Municipal Board of Directors Credit Union (“MCU”), for conspiracy to obstruct justice, obstruct justice and misrepresentation to federal agent. The charges stemmed from a scheme to hamper the federal criminal investigation into fraud and corruption at the MCU, a multibillion-dollar nonprofit financial institution, including misconduct by Kam Wong, the former director. General (“CEO”), and Joseph Guagliardo, a former New York City Police Department officer and member of the MCU Oversight Committee. Wong and Guagliardo were charged separately and had previously pleaded guilty to MCU embezzlement. ASH was convicted after a two-week jury trial before U.S. District Judge Lewis A. Kaplan and is expected to be sentenced on April 20, 2022 by Judge Kaplan.

US Attorney Damian Williams said, “Today’s conviction demonstrates our determination to uncover criminal conduct at the highest levels of the MCU and to ensure that those who attempt to thwart a federal investigation face the consequences of such corrosive conduct. As the jury unanimously concluded, Sylvia Ash took repeated measures, over several months, to attempt to obstruct the federal criminal investigation into the financial misconduct at MCU that took place during the tenure of Ash as chairman of the board. Obstruction of justice, especially by a sitting judge of a state court, is a serious crime, and Ash now faces punishment for his obstruction plan.

According to the complaint, the indictment, the replacement indictment, publicly available information, court documents and evidence presented during the trial in Manhattan Federal Court:

Municipal credit union

MCU is a New York, New York-based, non-profit financial institution that is federally insured by the National Credit Union Administration (“NCUA”). MCU is New York State’s oldest credit union and one of the oldest and largest in the country, providing banking services to over 500,000 members, and with over $ 4 billion in accounts members, each insured for at least $ 250,000 by the National Credit Union Share Insurance Fund, which is administered by the NCUA. Membership in MCU is generally available to employees of New York City and its agencies, New York State and Federal government employees working in New York City, and employees of hospitals, nursing homes. nursing and similar facilities located in New York State.

At all material times, MCU was overseen by a Board of Directors (the “Board”) and an Oversight Committee (the “Oversight Committee”), each consisting of MCU members, who were not expected to be remunerated. . Due to serious deficiencies in the oversight of the co-op by the board of directors and oversight committee, which came to light as part of the federal investigation, the New York Department of Financial Services (“DFS”) has dismissed the members of the supervisory committee in May 2018 and the board in June 2018. Subsequently, DFS appointed NCUA as the custodian of the credit union.

ASH

ASH is a judge of the New York State Supreme Court in Kings County. ASH has served as a judge in the New York State court system since approximately 2006, first as a judge in the Kings County Civil Court and then, from 2011, as a judge in the Supreme Court of Kings County. In or around January 2016, ASH was appointed Chairman of the Commercial Division of the Kings County Supreme Court. After the charges in this case came to light, ASH was suspended from duty.

ASH served on the MCU Board of Directors from or around May 2008 until August 15, 2016 when she resigned. From or around May 2015 until her resignation, ASH was Chair of the Board of Directors. ASH resigned after a complaint was filed against her by the New York State Commission on Judicial Conduct over a conflict of interest between her position as a state judge and her membership on the council of administration of the MCU. More than a year before her resignation, ASH was ordered to resign from the MCU board by the Judicial Ethics Advisory Committee, an instruction she failed to follow.

From at least 2012 to 2016, while she was a member of the MCU board and while Wong was CEO, ASH received tens of thousands of dollars in refunds and other benefits from MCU each year, including airline tickets, hotels, food and entertainment expenses for her. and a guest to attend conferences both at home and abroad, annual birthday parties at a minor league baseball stadium, paying telephone and cable bills and electronic devices. Even after his resignation from the board, Wong continued to provide or have the MCU provide benefits to ASH, such as Apple devices and sports tickets. As a sitting state judge, ASH was required to declare both her service on the board and the gifts and benefits she received from any outside source on an annual disclosure form from the State. But between at least 2012 and 2018, ASH never reported his service to the board or any MCU giveaways or perks.

ASH obstruction of justice

In January 2018, after Wong, then MCU CEO, was approached by federal law enforcement officials investigating Wong’s apparent financial misconduct, in an effort to protect Wong, ASH agreed and signed a false and misleading memorandum purporting to explain and justify millions of dollars that Wong had received from the MCU. Wong subsequently provided this false and misleading memorandum to federal agents in an attempt to demonstrate that the millions of dollars had allegedly been orally approved for him by ASH in June 2015, when she was chair of the board of directors. However, in reality neither ASH nor Council had approved the disbursement of these funds.

On March 1, 2018, shortly after Wong was put on administrative leave by the MCU, ASH was asked about the memorandum she signed for Wong. During this interview, ASH admitted that the memorandum was not accurate, but tried to justify the money Wong received by stating that the MCU’s general counsel at the time told him that the contract for Wong’s job gave him the opportunity to receive this money. This statement was false.

On March 13, 2018, ASH received a subpoena to appear before a federal grand jury (the “First Summons”), which required the production of documents relating to various matters, including Wong’s compensation, and all communication with Wong until on the date of the first assignment. . On April 6, 2018, in a telephone interview with a federal agent, ASH falsely stated that she had no documents responding to the first subpoena.

On June 8, 2018, after Wong was accused of MCU embezzlement and the government carried out a court-authorized search of Guagliardo’s residence, ASH was questioned by telephone for the second time about the first. subpoena. During this interview, ASH again falsely stated that it did not have any documents responding to the first subpoena.

On June 18, 2018, ASH was served with a second subpoena to appear before a federal grand jury (the “second subpoena”), which required the production of, among other things, all correspondence with Wong and Guagliardo; all documents relating to a criminal investigation, internal investigation or audit related to Wong; and all documents regarding ASH items of value received from MCU, Wong or Guagliardo. Soon after, ASH went to an Apple Store and deleted an iPhone X that Wong had provided to her in January 2018. Additionally, ASH deleted emails from her Gmail account, including all of her emails. mails with Guagliardo, neither of which was produced in response to either of the two federal grand jury subpoenas addressed to him. ASH also later erased two MCU-issued iPads she had received.

On July 6, 2018, on behalf of ASH, her then lawyer produced documents to the government in response to the second subpoena. This production was materially incomplete and did not contain any text messages, e-mails and other documents that ASH possessed or had in its care or control that responded to the second summons.

On July 9, 2018, ASH participated in a voluntary interview with the United States Attorney’s Office. During this interview, while accompanied by her then lawyer, ASH made several false statements, including repeating false statements regarding her alleged conversations with the former MCU general counsel about the reception. cash payments by Wong and falsely claiming that she and her aunt had taken a trip to Las Vegas paid by MCU, including airfare, accommodation and entertainment, after her resignation as all his travel arrangements were paid for by MCU prior to his resignation, when in reality all expenses were paid after his resignation.

On or around October 11, 2019, ASH was arrested and her cell phone was seized. After obtaining a court-authorized search warrant, ASH’s phone was searched, which revealed, among other things, numerous text messages, including with Wong and Guagliardo, which were withheld in response to the first and second. subpoenas.

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ASH, 64, of Brooklyn, New York, was convicted of one count of conspiracy to obstruct justice, carrying a maximum sentence of five years in prison; one count of obstructing justice, punishable by up to 20 years in prison; and one count of misrepresentation, punishable by up to five years in prison. The maximum potential penalties are prescribed by Congress and are provided here for informational purposes only, as the defendant’s sentence will be determined by Judge Kaplan.

On June 4, 2019, Wong was sentenced to 66 months in prison for MCU embezzlement and was ordered to confiscate $ 9,890,375 and pay restitution in the same amount to MCU.

On July 23, 2020, Guagliardo was sentenced to 27 months in prison for MCU embezzlement and was ordered to confiscate $ 425,514 and pay $ 468,189 in restitution to MCU.

U.S. Attorney Williams praised the outstanding work of special agents in the U.S. Attorney’s Office. Mr. Williams also thanked the New York County District Attorney’s Office and the DFS for their assistance.

The case is handled by the Office’s Public Corruption Unit. United States Assistant Prosecutors Eli J. Mark, Daniel C. Richenthal, and Jonathan Rebold lead the prosecution, with the assistance of United States Special Assistant Prosecutor Alona S. Katz of the New County Attorney’s Office. York.

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