PHOENIX – Federal prosecutors rejected NCUA’s pleas for a strict sentence for a leading participant in the member business loans fraud at Yuma’s AEA FCU and yesterday recommended a more lenient term of less than a year behind bars.
The recommended sentence for Frank Ruiz, convicted in the $60 million MBLs fraud that sunk the one-time $410 million credit union, comes despite pleas by the NCUA conservator for the troubled credit union for a stiff sentence of as long as ten years.
But federal prosecutors with the U.S. Attorneys’ office said Ruiz’s testimony was critical in wining convictions against William Liddle, the credit union’s MBLs director, for fraud and money laundering for, among other things, accepting $1 million in bribes from Ruiz to approve $58 million of doomed MBLs. Liddle is scheduled to be sentenced in May.
Prosecutors disputed NCUA estimates that Ruiz’s role in the MBLs fraud cost the one-time Arizona Educators Association credit union $19 million in losses, saying they believe the figure is much less, closer to $4.5 million. Ruiz is scheduled to be sentenced next month.
In a letter to the court earlier this month, the NCUA conservator for AEA FCU slammed the government’s recommendation as too lenient. “Frank Ruiz was not a poor, destitute pawn in Bill Liddle’s scheme to defraud AEA,” wrote the conservator, “he was an active, willing participant.”
NCUA has operated AEA FCU since December 2010. It had negative $13 million of capital at year-end and is only operating because of an emergency $20 million loan from NCUA.
