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AEA consultant, Ruiz employee testify at Liddle trial
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 Yuma.Sun.com and KSWT.com.
The trial in U.S. District Court in Phoenix against a former AEA official is well ahead of schedule, with the prosecution calling three more witnesses to the stand on Wednesday.
On trial are William Liddle, who was the business lending manager for AEA Federal Credit Union until resigning in December 2009, and his wife, Rhonda. Both were indicted on 68 counts of conspiracy, money laundering and fraud in a case that cost the financial institution millions of dollars and led to its insolvency.
Steve Sala, a consultant, testified that AEA hired him in April 2010, a few months after Liddle left, to help straighten out the business lending department.
Everything was a mess, he said, adding that he had never seen anything like it. Important loan documents were missing and appraisals for appraiser Bill Beuvais “were suspect,” Sala said.
Sala also noted that a number of checks were made out to Ruiz or to cash from his loans. Typically, checks are made to a contractor or vendor to pay bills. When made out to the loan holder, you lose the ability to know where the assets actually are going.
He further testified that it is highly irregular for the lender to be the statutory agent. And it was “disturbing” that Liddle had a business card for one of Ruiz's entities in which he was listed as the chief financial officer.
Sala said he found “glaring problems that an unsophisticated person could have figured out. Things didn't add up.” And it was clear good lending practices had not been followed for some time, he said.
Initially, he said, he estimated that AEA needed an additional $10 million to $12 million to cover bad loans. By the time he left in September 2011, he had revised that to more than $30 million.
Also on the stand Wednesday was Daria “Sunni” Espinoza, who had worked from August 2008 to July 2009 as the controller for various entities owned by Frank Ruiz.
She said when she asked about Ruiz's loans and loan limits, Liddle told her that he could get as much money as he needed. She also testified that none of the entities had any money, and loan payments were being made from other loans. She also saw Ruiz withdraw money from his loans with no documentation of what the money was going for.
Espinoza said Ruiz had no idea about his finances and Liddle handled it all. Even though Liddle's name wasn't listed as an owner, he made all the decisions, including the hiring, she testified.
FBI agent Joseph Montoya then took the stand, testifying that Ruiz would receive checks made out to him or for cash, each for several thousand dollars. Shortly after, Mrs. Liddle would made a deposit into the couple's personal account with Chase for the same amount, he said.
At the end of the day, Judge Susan Bolton asked for a status on the trial. The prosecution noted that it was ahead of schedule and intended to call its final witnesses on Thursday. Liddle is expected to take the stand next week.
Joyce Lobeck can be reached at email@example.com or 539-6853. Find her on Facebook at www.facebook.com/YSJoyceLobeck or on Twitter at @YSJoyceLobeck.