(STL.News) – Geoffrey S. Berman, United States Attorney for the Southern District of New York, announced that Joseph Guagliardo, a/k/a “Joseph Gagliardo,” a former New York City Police Department (“NYPD”) officer and former member of the supervisory committee (the “Supervisory Committee”) of Municipal Credit Union (“MCU”), a non-profit financial institution, pled guilty today to abusing his leadership position at MCU to embezzle more than $400,000 dollars from the MCU. Guagliardo pled guilty before United States District Judge Denise L. Cote.
U.S. Attorney Geoffrey S. Berman said: “As he has now admitted, Joseph Guagliardo betrayed the trust of MCU’s members, who elected him to supervise and protect MCU, by abusing his position to steal hundreds of thousands of dollars. Today’s plea is yet another step forward in this Office’s efforts to fully investigate and prosecute those who abused positions of authority at MCU, a multibillion-dollar, non-profit, federally insured credit union, to enrich themselves and their families at the expense of its hard-working members.”
According to the allegations contained in the Complaint, Information, publicly-available information, court filings, and statements made during the plea proceeding:
MCU is a non-profit financial institution headquartered in New York, New York, which is federally insured by the National Credit Union Administration (“NCUA”). MCU is the oldest credit union in New York State and one of the oldest and largest in the country, providing banking services to more than 500,000 members, and with more than $2.9 billion in member accounts, each of which is federally 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, 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 is a former officer with the NYPD and a former Supervisory Committee member of MCU, a volunteer position. In or about 1993, Guagliardo joined the Supervisory Committee, and remained in that position until he was removed from that position by the New York State Department of Financial Services on or about May 24, 2018, except for a brief period of time when he served as a member of MCU’s board of directors in or about 2008.
Under New York banking law, the Supervisory Committee’s duties included supervision of the actions of MCU’s board of directors and officers. MCU’s written conflict of interest policy, which was regularly distributed to board members, Supervisory Committee members, and others, provided, among other things, that members of MCU’s “Board of Directors and Supervisory Committee may not do business with the Credit Union, either individually or as representative of any business entity.”
From 2009 through May 2018, in violation of MCU policy and his fiduciary duty as a member of the Supervisory Committee, Guagliardo engaged in a scheme to obtain money from MCU to which he knew he was not entitled, and took steps to conceal his efforts. Among other things, Guagliardo caused MCU to direct more than $250,000 to a security company created and controlled by Guagliardo , but operated in another’s name, and then directed that money from that company be paid to him and to his family members. Guagliardo also over-billed MCU more than $200,000 for purported web advertising services provided by a non-profit organization that Guagliardo also controlled.
In addition, during substantially the same period in which Guagliardo was committing these offenses, Guagliardo unlawfully distributed controlled substances to the former chief executive officer of MCU, in the form of prescription drugs, some of which were obtained from Guagliardo ’s spouse, who worked as a doctor affiliated with a public hospital, and some of which were obtained from a different doctor affiliated with the NYPD.