Brooklyn Supreme Court Justice Sylvia Ash and retired NYPD officer Joseph Guagliardo have been arrested in connection with a fraud case involving the New York City-based Municipal Credit Union (MCU).
Ash was arrested Oct. 11 for destroying evidence and lying to federal investigators during an investigation of MCU. Guagliardo was arrested on embezzlement and fraud charges.
MCU CEO Kam Wong was sentenced to five and a half years in prison earlier this year for embezzlement. Connected to this embezzlement, Ash allegedly signed papers that justified millions to end up in Wong’s pocket to protect Wong from an investigation into the corruption.
“ASH agreed to and did sign a false and misleading memorandum purporting to explain and justify millions of dollars in payments that Wong had received from MCU, which was then provided by Wong to law enforcement officers,” a statement by the Southern District of New York U.S. Attorney’s Office said.
Court documents say Ash served as the chair of MCU’s volunteer board of directors from 2008-2016. During this time, she allegedly received tens of thousands of dollars annually in reimbursements and benefits from the credit union and other benefits including coverage of airfare, hotel, food and entertainment expenses. After Ash resigned, Wong kept some of the benefits in place for her, including Apple devices like the iPhone X.
While banks are for-profit entities, credit unions are not-for-profit, which leaves them exempt from state and federal taxes so they can charge lower interest rates. MCU is one of the largest credit unions in the country with more than 500,000 members and about $3 billion in accounts. MCU is available to employees of New York City and its agencies; employees of the federal and New York state governments who work in New York City; and employees of hospitals, nursing homes and similar facilities located within New York State.
Guagliardo, a former NYPD officer who retired in 1989, also faces embezzlement and fraud charges. He was part of the MCU supervisory committee — a volunteer position aimed at preventing corruption and conflicts of interest — from 1993 until around 2008 and allegedly used MCU funds to enrich himself.
Guagliardo also is charged with providing Wong with prescription drugs he obtained illegally. Guagliardo allegedly defrauded and embezzled hundreds of thousands of dollars, funneling it to a security company he controlled but operated in another’s name. He also overbilled for web advertising services by a nonprofit organization for retired cops called the 10-13 Association that he controlled.
Ash, who had served on the bench from 2010 and has served in the state Division of Judicial Conduct, has been “relieved of her judicial duties,” the Office of Court Administration said in a statement.
Ash faces up to 20 years in prison, and Guagliardo faces up to 30. Ash is set to reappear in court Nov. 1.