PHOENIX – Local developer Frank Ruiz testified in federal court yesterday that he obtained a series of member business loans and additions that he never sought rising to the millions of dollars from William Liddle, the former chief business loan officer at Yuma’s AEA FCU, who is on trial this week for fraud.
Frank Ruiz, who agreed to testify against Liddle in exchange for leniency on related charges against him, told the court in one case a loan originally for $21,000 in February 2008 had soared to $1.2 million by May 2009.
In another case, according to Ruiz, Liddle convinced him to take out a $429,000 MBL to buy a home because Ruiz had negative net worth and could not qualify for a residential mortgage, then directed Ruiz to lease the home to Liddle and his family with an option to buy. Ruiz, who never lived in the house, testified that he didn’t look at other homes and bought this one only because Liddle said he should.
On the first day of the trial Dan Thelen, a long-time friend of Bill Liddle’s testified that Liddle convinced him to take out millions of dollars in member business loans and showered him with cash in return.
Ruiz is expected to testify when the trial resumes this morning that he paid Liddle and his wife Rhonda Liddle more than $1 million in cash and merchandise bribes to obtain more than $22 million in MBLs to buy local businesses that eventually failed.
William and Rhonda Liddle have been charged with 68 counts of fraud, money laundering and conspiracy in connection with the MBL scheme.
The scheme created tens of millions of dollars in losses for the one-time $410 million credit union and forced NCUA to take AEA, originally the credit union for the Arizona Education Association, under conservatorship in December 2010. NCUA reported yesterday that AEA now has negative net worth of $14 million and only remains afloat because of a $20 million emergency loan.
