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Testimony begins in loan officer Liddle's trial
- Click to read trial memo for 1-23-12 (PDF)
- Click to read list of counts against Liddles (PDF)
- Click to read trial minutes for 1-18-12 (PDF)
- Click to read ammended trial minutes for 1-20-12 (PDF)
Editor’s note: The Yuma Sun and KSWT-TV are partnering to cover the AEA fraud trial in Phoenix and will have daily coverage in both the Yuma Sun and on KSWT, as well as YumaSun.com and KSWT.com.
PHOENIX — On the third day of the trial of a former AEA business loan officer, Dan Thelen spent six hours on the witness stand relating their friendship and the increasing web of loans and business activities he found himself involved in that left him millions of dollars in debt and raised the specter of money laundering and fraud.
Thelen was the first to take the witness stand Tuesday in the trial of William Liddle and his wife, Rhonda, that began last week in U.S. District Court in Phoenix and is scheduled to last until March 2.
The Liddles face 68 counts of money laundering, fraud and conspiracy in a case that involved millions of dollars in bad debt for the credit union and led to its insolvency.
Thelen said that shortly after moving to Yuma in the fall of 2005 to take a job at Yuma Regional Medical Center, his family and the Liddle family became close. Soon they were at each other’s homes for barbecues and vacationed together, and Thelen and Liddle would frequently enjoy a drink after work.
“Bill was my best friend,” Thelen said.
A few months later, Liddle introduced Thelen to Frank Ruiz, a Yuma businessman who was eventually indicted on the same counts as the Liddles but reached a plea agreement in June, agreeing to testify against the Liddles in return for a lesser sentence. The three men spent a lot of time together.
Thelen said he shared with Liddle that he had become dissatisfied with his job, to which Liddle suggested he become self-employed. In January 2007, Thelen started his own company, Desert Capital Partners, initially with three other men as members at Liddle’s suggestion and with Liddle listed as the statutory agent.
A year later, Thelen quit his job when Liddle obtained work for him as a construction inspector to ensure that work had been completed on AEA-financed projects before invoices were paid.
Thelen acknowledged he had no background in construction but read a book, took a two-day course and spent an afternoon with Ruiz’s brother, who was a free-lance construction inspector, then did a few jobs for AEA.
In April 2007, Liddle asked him to take out a $5,000 loan, saying it was a formality, Thelen testified. The promissory note loan was modified, with Liddle approving increasing the amount to $100,000. Thelen said he neither asked for nor needed the money.
Other loans from AEA followed. One was for $500,000 for Thelen to buy property next to the historic downtown Kress building, which Ruiz had purchased and was renovating with plans to open a nightclub. Thelen testified that Liddle assured him it was good investment.
Plans were to develop the property into the Long Bar, with Ruiz paying enough money to share the back patio, space he needed to install a back entry to the Top of the Kress.
Thelen acknowledged he had no bar or development experience, didn’t have the property appraised and didn’t know what it was zoned.
Thelen said Liddle told him he wanted Thelen to buy the property to help the project because Ruiz had borrowed his debt limit.
After dinner and drinks, Liddle suggested another deal to Thelen, as well: that Thelen provide the “parking lot,” the money upfront to buy the land and fund the development of the Yuma Fun Factory, which would then be leased to Ruiz.
After being told “AEA needs you, Ken Bredemeyer (former AEA president) thinks highly of you, you have a high credit limit and you’re doing a good job as a construction inspector,” Thelen signed a promissory note for $3.3 million in December 2008.
Asked in court Tuesday if he wanted to take on that much debt, Thelen paused for a moment, then responded, “Not particularly.” However, he said, he was flattered by Liddle’s words, he trusted Liddle as his best friend and thought it would be nice to part of the project.
In the meantime, Thelen said, he discovered that $600,000 had been added to his initial promissory note for the Fun Factory without his knowledge and was told by Liddle not to worry about it because he would oversee it.
A year later, Thelen found that escalating costs had driven his debt for the Fun Factory to $7.4 million.
Other promissory notes further added to Thelen’s mounting debt. He said he also growing increasingly unhappy about any association with Ruiz.
So Thelen told Liddle he wanted out and accepted a job in Seattle. On the drive there, though, he decided he needed to be in Yuma and re-engaged in the projects in hopes of getting out from under his debt.
Liddle then asked Thelen to be the “middle man” for the repayment of money Ruiz had borrowed from Liddle. Per Liddle’s instructions, Thelen set up an account with Chase, explaining that Liddle told him not to use a local bank because he didn’t want AEA to find out and ask “stupid questions.”
A total of $20,000 was deposited, which Thelen then withdrew $7,000 or $8,000 at a time in $100 bills at Liddle’s instruction and delivered to either Liddle or Liddle’s wife. When the account was empty, Thelen closed the account, which angered Liddle, who told Thelen that quickly opening and closing accounts was “red flag.”
So Thelen opened another account with Wells Fargo and the process was repeated, depositing checks from AEA or Ruiz, then delivering payments in $100 bills to Liddle or Mrs. Liddle.
In the meantime, Thelen also sold the Long Bar property to Ruiz.
Thelen said he was approached by the FBI in March 2010 and advised by his attorney to continue to cooperate in the FBI’s investigation into Liddle and Ruiz.
He also said he was not granted immunity, nor was he given a written statement that he wouldn’t be prosecuted. But he was not indicted in the case against Ruiz and Liddle.