PHOENIX – Prosecutors estimate the MBLs fraud committed at Yuma’s AEA FCU by the director of member business lending William Liddle will cost the National CU Insurance Fund as much as $34 million after resolution of all of the loans.
The estimated losses are on a total of $60 million of MBLs approved by Liddle, according to sentencing recommendation submitted to the U.S. District Court for Arizona by the U.S. Attorney’s office.
Lawyers for Liddle, convicted in February of bank fraud and money laundering, claim the one-time credit union executive may have been convicted of accepting bribes in the case but always believed the loans were good credit risk. In addition, they say the poor local economy in Arizona has contributed greater losses on those loans. “the most critical factor here is that the Defendant did not intend that the loans involved would fail and end up in default,” said Liddle’s lawyers.
The amount of losses on the loans will be a critical factor for the judge in determining the length of a prison sentence for Liddle.
Prosecutors also said that Liddle cooked up a story to hide the cash bribes he accepted from several local developers that he had brought a safe home from Japan with him stuffed with U.S. currency and that was the derivation of the cash. Liddle’s wife, Rhonda Liddle, was also convicted on money laundering charges in the case. She is also awaiting sentencing.
Weighed down by the failing MBLs, the one-time $410 million credit union, chartered to serve the Arizona Education Association, was taken under conservatorship by NCUA in December 2010. At the end of the first quarter AEA had negative $13 million in equity and was operating with an emergency $20 million NCUA loan, which it is allowed to count as net worth under a new federal law.
