Press "Enter" to skip to content

Judge Obstructed Justice in $10 Million Corruption Case, U.S. Says

Judge Obstructed Justice in Million Corruption Case, U.S. Says
The Brooklyn judge was accused of destroying text messages and emails during a fraud inquiry at a major credit union.

When the former chief executive of the Municipal Credit Union pleaded guilty last year to stealing nearly $10 million from the 500,000-member financial institution, federal prosecutors said he had gone to some lengths to hide his long-running embezzlement scheme.

The chief executive, Kam Wong, “tried to cover up what he had done by making false statements to federal investigators and creating false and misleading documents,” the prosecutors said.

On Friday, federal prosecutors said that Mr. Wong had been helped in the cover-up by a high-ranking ally: a Brooklyn judge who led the credit union’s board of directors.

The judge, Justice Sylvia G. Ash of State Supreme Court, was arrested after arriving at La Guardia Airport from Miami. She was charged in a criminal complaint with trying to thwart the federal inquiry into Mr. Wong’s theft in several ways.

Justice Ash, prosecutors said, had signed a false memo that tried to justify millions of dollars in improper payments that Mr. Wong received from the credit union; concealed and deleted text messages and emails, and wiped clean her iPhone issued by the credit union; and made false and misleading statements to federal investigators.

The judge “took repeated steps to obstruct a federal investigation into significant financial misconduct,” said Geoffrey S. Berman, the United States attorney for the Southern District of New York.

Justice Ash, 62, was charged with one count of conspiracy to commit obstruction of justice and two counts of obstruction of justice. She made an initial appearance on Friday before a federal magistrate judge, who set the terms of her release at a $500,000 personal recognizance bond.

She must also wear a GPS location-monitoring device, and will be detained until it is fitted on Tuesday, a spokesman for Mr. Berman said.

In outlining the charges against Justice Ash, prosecutors suggested a possible motive for her behavior: From 2012 to 2016, while Mr. Wong was chief executive and she was on the board, she “received annually tens of thousands of dollars in reimbursements and other benefits” from the credit union, “including airfare, hotels, food and entertainment expenses for her and a guest to attend conferences domestically and abroad, as well as payment for phone and cable bills, and electronic devices.”

Justice Ash’s lawyer, Roger Archibald, said that she would fight the charges.

“My client maintains her innocence,” he said. “She didn’t do anything wrong and she expects to be fully exonerated.” Mr. Archibald also rejected the suggestion that there was anything inappropriate about the reimbursements cited by prosecutors. “There was nothing that she received that was above and beyond what every board member received,” he said.

After the charges were announced, Justice Ash was immediately stripped of her judicial duties pending the outcome of the case and suspended with pay from her $210,000-a-year position by the state Court of Appeals, according to a court system spokesman.

Justice Ash was first elected to Civil Court in Brooklyn in 2005 and elected to the State Supreme Court bench in 2010. She is the presiding judge of the court’s Commercial Division, which handles civil matters involving sums greater than $500,000.

Among her other duties, Justice Ash previously served on New York State’s Commission on Judicial Conduct. According to its most recent annual report, the commission’s objective is “to enforce high standards of conduct for judges, who must be free to act independently, on the merits and in good faith, but also must be held accountable should they commit misconduct.”

In addition to charges against Justice Ash, prosecutors said on Friday that they had arrested Joseph Guagliardo, a retired New York City police officer, in connection with Mr. Wong’s embezzlement scheme.

Mr. Guagliardo, prosecutors said, used his position on the credit union’s supervisory committee — and specifically his role overseeing the security and fraud department — to direct more than $250,000 to a “purported security company” that he controlled that “did little or no real work,” and to overbill for online advertising services provided by a nonprofit he controlled.

Mr. Guagliardo, 62, was also charged with illegally providing Mr. Wong with prescription drugs. Mr. Guagliardo got some of the drugs, prosecutors said, from his spouse, “who worked as a doctor affiliated with a public hospital,” and some “from a doctor affiliated with the New York City Police Department.”

John Arlia, Mr. Guagliardo’s lawyer, did not respond to a request for comment.

The Municipal Credit Union, which is based in Manhattan, is the oldest credit union in New York State and one of the oldest and largest in the United States, according to prosecutors. It has nearly $3 billion in accounts held by its members, who are typically public employees.

Correction: 

An earlier version of this article misstated Justice Sylvia G. Ash’s status with New York State’s Commission on Judicial Ethics. She previously served on the commission; she is not currently a member.

Be First to Comment

Leave a Reply

%d bloggers like this: