Federal judge denies municipal credit union’s restitution claim

United States Courthouse for the Southern District of New York. (Source: Shutterstock)

A federal judge in New York has dismissed a $4.2 billion restitution claim from the Municipal Credit Union to recover its legal and investigative costs involving its former board chair, Sylvia Ash, who was found guilty of obstructing justice and making false statements to federal agents.

The credit union has sought restitution from U.S. District Court Judge Lewis A. Kaplan for the Southern District of New York because Ash’s criminal conduct has resulted in additional legal and investigative costs for MCU to determine whether the Former CEO Kam Wong had hijacked the credit union and continued to pay. Wong’s salary after the obstruction program began until Wong was fired.

Court testimony and evidence proved that Ash, a former state judge who served on the MCU’s board of directors from 2008 to 2016, suppressed and withheld evidence from a federal grand jury and lied to several repeatedly to federal agents to protect himself and Wong, who was at the center of a multimillion-dollar fraud and corruption investigation in 2018. He pleaded guilty to embezzling nearly $10 million and was sentenced to five and a half years in prison in 2019.

Federal prosecutors backed the MCU’s request for restitution under the Victims and Witnesses Protection Act of 1982, which gives judges discretion to award restitution to victims who have been harmed by a criminal offense.

In his July 21 memorandum and order, however, Judge Kaplan said he doubts the New York-based MCU qualifies for restitution as a victim under VWPA.

“First, it is not immediately apparent that any of the offenses for which Ms. Ash was convicted are capable of identifying individual victims,” ​​Judge Kaplan’s order reads in part. “Courts have widely held that crimes of obstruction, in general, are akin to immigration offenses in the sense that the victim is society as a whole.”

It also concluded that “the nexus between (Ash’s) offending conduct and MCU’s alleged losses is too attenuated to favor an exercise of discretion to award restitution in this matter.”

MCU did not respond to CU time‘ request for comment.

Kaplan sentenced Ash to 15 months in prison in April and ordered her to pay an $80,000 fine.

According to prosecutors, Ash has $2.2 million in assets and his net worth is $2 million. And while the criminal case had been pending for more than two years, she raised more than $210,000 a year, which matched her salary as a state judge. She resigned from her post in March.

Ash is appealing his conviction and sentence, but Kaplan has denied his request to remain free on bail. She recently began serving her sentence in a minimum-security federal prison in Alderson, W. Va., according to the Federal Bureau of Prisons.

Read more: Judge Kaplan’s decision.

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