PHOENIX – The NCUA conservator for AEA FCU slammed a recommendation by federal prosecutors that the key witness in the huge member business loan fraud at the Yuma credit union spend no more than 12 months behind bars, even after causing the credit union $19 million in losses.
“Yesterday all of Yuma, Arizona learned that, without doubt, white collar crime really DOES pay,” Thomas Martin, the NCUA conservator for the one-time $410 million credit union, told the acting U.S. Attorney for Arizona.
Martin’s ire was expressed in a letter on the sentencing for Frank Ruiz, the real estate developer who pleaded guilty to paying AEA’s MBL’s chief William Liddle more than $1 million in bribes to obtain more than $50 million of loans. Lawyers for Ruiz, who is scheduled to be sentenced this afternoon, are seeking a sentence of probation.
Liddle was convicted of 54 counts of fraud and money laundering Feb. 10 based largely on Ruiz’s testimony and is scheduled to be sentenced in May.
The MBLs fraud sank AEA, the former Arizona Education Association credit union, and forced NCUA to take it under conservatorship in December 2010. The credit union reported negative capital of $14 million at year-end and remains operating only because of a $20 million emergency loan from the National CU Share Insurance Fund.
The AEA conservator said it was his understanding that Ruiz would be sentenced to seven-to-ten years in prison, even with his help in prosecuting Liddle. Ruiz, he said, “was NOT and is not an “uneducated and unsophisticated businessman. He is not “humble…”contrite…or diffident.”
“During the entire course of the investigation and court proceedings, Mr. Ruiz remained loud, brash and cocky while holding court in his Yuma nightclub on a nightly basis—a nightclub purchased with illicit funds stolen from AEA Federal Credit Union—and a nightclub through which millions of additional dollars in fraudulent loans were laundered and never accounted for,” wrote AEA’s acting CEO Martin.
“Frank Ruiz was not a poor, destitute pawn in Bill Liddle’s scheme to defraud AEA,” wrote Martin, “he was an active, willing participant.”
“When a thief is instrumental in the systematic theft and laundering of over $50 million and then gets their sentence reduced to a literal slap on the wrist merely by cooperating with authorities once caught, is it any wonder our legal system is choked with white collar criminals eager for their turn at the feeding trough?” asked AEA’s Martin.
“The community of Yuma is outraged, and rightfully so,” he added.
