Most Viewed Stories
Yuma businessman pleads guilty in case that cost AEA millions
- Court order hints at red-flag clues to AEA crisis - May 5, 2011
- Trial date set for defendants in case that cost AEA millions - May 4th, 2011
- More bad news for AEA credit union - Feb. 7, 2011
- A deeper look at suspects in AEA fraud case- Dec. 2, 2010
- $1 million in kickbacks alleged in AEA fraud case - Dec. 2, 2010
- Yuma Fun Factory subject of bankruptcy, foreclosure - Aug. 14, 2010
A Yuma businessman has admitted to taking part in a multimillion-dollar kickback scheme to obtain fraudulent business loans from AEA Federal Credit Union in a plea agreement that could send him to federal prison for up to 15 years.
He is scheduled to be sentenced in October.
According to documents from the U.S. District Court in Phoenix, Frank Ruiz pleaded guilty Wednesday to charges of transactional money laundering and conspiracy for his role in the misuse of credit union funds, which ultimately cost the financial institution millions of dollars and contributed to its insolvency.
Under the terms of the plea agreement, Ruiz could be sentenced to up to 10 years in prison, three years of supervised probation and a maximum $250,000 fine on the money laundering charge. He also faces a maximum $250,000 fine, up to five years in prison and three years of supervised probation on the conspiracy charge.
If the judge orders the sentences to be served consecutively, and he receives the maximum sentences on both charges, Ruiz could receive a combined prison term of 15 years.
However, the plea agreement also contains a stipulation that if Ruiz cooperates fully with investigation into two co-defendants and testifies in the case, the federal government will recommend that he receive the low end of the sentencing range or probation if available.
After a lengthy FBI investigation, a federal grand jury in early December handed down a 68-count indictment against William Liddle, former vice president of business lending for AEA; Liddle's wife, Rhonda; and Ruiz.
The indictment alleged that Liddle and his wife received almost $1 million from Ruiz in exchange for $22 million in fraudulent business loans made to Ruiz as the developer for Yuma Fun Factory and Top of the Kress. According to the indictment, Liddle and his wife received cash, a home, vehicles and other benefits from Ruiz.
According to the plea agreement, Ruiz admitted that: “I agreed to provide W. Liddle and/or R. Liddle cash from loan draws I made on AEA business loans for my entities, and all of those loans were originally approved by W. Liddle.
“From at least May of 2007 to September of 2008, I routinely obtained loan draws on my AEA business loans via check, immediately cashed the check at AEA, and then provided the cash to either W. Liddle or R. Liddle shortly thereafter. I did this at the times, in the amounts, and in the manner requested by W. Liddle.
“At the request of W. Liddle, I used AEA business loan funds to purchase a 1969 Camaro for $25,000 for myself and a 1980 Corvette for $9,599 for the Liddles. Additionally, in late 2008, I provided R. Liddle with a check for $39,000 that was used by the Liddles to purchase a 2007 Toyota Sequoia. The funds came from a loan draw on an AEA business loan to CTW that was originally approved by W. Liddle and had been increased by W. Liddle,” the document stated.
The Yuma Fun Factory, which Ruiz had sold, was closed in April 2010, less than a year after it opened. Its personal property was the subject of a Chapter 7 bankruptcy filing, and its real property was in foreclosure. According to bankruptcy court records, Yuma Fun Factory LLC listed its assets as worth $441,850 while it owed AEA $4.7 million.
Top of the Kress, a nightclub Ruiz opened in downtown Yuma in March 2010, filed for Chapter 11 bankruptcy protection in July 2010. It is still in business.
Ruiz and the Liddles were arrested on Dec. 2, a day after the indictment was returned. The Liddles are scheduled to go to trial on Jan. 10.
James Gilbert can be reached at email@example.com or 539-6854.