Prosecution, defense rest in AEA fraud trial

PHOENIX — Final update 9:15 p.m. -- Jury deliberations are expected to begin Thursday morning after attorneys wrap up their final arguments in the federal court trial of William and Rhonda Liddle.

The Liddles are on trial in U.S. District Court in Phoenix on 68 counts of conspiracy, transactional money laundering and fraud. The federal government alleges the Liddles received more than $1 million in cash, a house and two vehicles in a kickback scheme in which Liddle in his capacity as head of the business lending department for AEA Federal Credit Union approved millions of dollars that went bad.

During the trial, the prosecution called eight witnesses, while Liddle was the only witness to take the stand in his defense. The defense for Rhonda Liddle called one witness, her sister, as a character witness.

Several members of senior management for AEA were in the courtroom Wednesday to hear the jury instructions and closing arguments.

Judge Susan Bolton denied a motion by Rhonda Liddle’s attorney to acquit her.

In his closing argument, Mark Paige elaborated at length that Rhonda Liddle was not a party to the crimes her husband allegedly committed, saying she was not privy to any discussions, meetings or other information about any of the alleged crimes. And her husband earlier testified that he did not discuss business with his wife.

“She’s here because she’s married to Mr. Liddle and money went into their joint account,” Paige told the jury. “That does not add up to criminal conduct.”

He said all Rhonda Liddle did was deposit cash a few times while running errands for the household, such as buying groceries.

Otherwise, Paige said, she was taking care of the home and dropping her children off at school, where she was “ambushed” by an FBI agent who wanted her to cooperate in the investigation against her husband.

“There is zero evidence of her willfully participating (in the alleged crimes) or ever having any knowledge of them.”

He called it ironic that his client, a housewife, is on trial while witnesses who have more education and experience in the business world and were involved with William Liddle aren’t facing charges in the case.

Paige is to wrap up his closing arguments Thursday morning.

Earlier Wednesday, the prosecution and William Liddle’s attorney gave their closing arguments.

Raymond Woo, assistant U.S. attorney for the prosecution, traced a pattern of loans and loan increases being approved by Liddle for businessman Frank Ruiz, a co-defendant in the case who entered a plea agreement. A short time after receiving the loan, said Woo, Ruiz would draw on it and the same day or soon after Rhonda Liddle would deposit cash of the same amount as the draw in the couple’s joint banking account with Chase.

This happened on several occasions, with Woo displaying copies of loan documents, checks to Ruiz and deposit slips signed by Rhonda Liddle.

“Her job was to launder money,” Woo said.

He also said that the pattern extended to the purchase by the Liddles of one vehicle.

In addition, he reminded the jury that the Liddles were renting a house at 1401 W. Parkway Drive that Ruiz had purchased at Liddle’s suggestion. Liddle had testified that they paid the rent in cash for 19 months. When they purchased it, he said they paid cash for it from money they shipped from Japan, where they had lived for a while.

At the time the Liddles purchased the house, however, Woo countered, the couple received a large check from Dan Thelen, another major borrower from AEA.

The other vehicle, a vintage Corvette that Liddle purchased for his wife, was paid for with a wire transfer by Ruiz from one his AEA accounts, Woo said.

In his closing arguments, David Eisenberg, William Liddle’s attorney told the jury that “things are not always as they seem” and referred to “Alice in Wonderland.”

He reiterated Liddle’s testimony from Tuesday that he was directed in late 2006 to increase business loans. That same year, AEA was experiencing heavy losses in its consumer auto loans. That meant AEA likely was under scrutiny and any discrepancies would show up in daily balance reports that should have been obvious to internal auditors if they were paying attention.

Eisenberg also restated Liddle’s testimony that he had discussed all larger business loans with AEA’s former CEO, Ken Bredemeyer.

“Lots of things were going south with AEA,” Eisenberg said, telling the jury that new loans and loan increases were approved in an effort to finish troubled projects.

“Bill Liddle wasn’t trying to destroy the economy. He was trying to make the projects he was involved in to work.”

That included the Yuma Fun Factory, which was on the verge of foreclosure by the original owner when Ruiz took it over with funding from AEA, Eisenberg said. And, he said, Liddle was onsite during the final stages of construction to oversee the project because of the cost overruns.

PHOENIX – Updated 2:45 p.m. – William Liddle’s attorney, David Eisenberg, is the midst of his closing arguments.

Eisenberg noted that all the money Liddle received from Dan Thelen and Frank Ruiz was repayment for personal loans Liddle had given them, saying it is not illegal or a crime for a banker to have ideas to help his client make money.

Eisenberg said the only business Liddle considered having ownership interests in was Top of the Kress, noting that Liddle was upfront with former AEA CEO Ken Bredemeyer about that.

Eisenberg stressed repeatedly that all the major loans had been discussed with Bredemeyer, and Bredemeyer had approved them.

The court has adjourned for a break. Closing arguments will continue this afternoon.

PHOENIX - Updated 12:30 p.m. - The prosecution is in the middle of closing arguments in the William and Rhonda Liddle AEA fraud case. So far, there has been a lot of discussion about how much Rhonda Liddle knew and how she participated in the alleged fraud.

In its arguments, the prosecution noted that William Liddle sent an email to Frank Ruiz in 2009, saying his companies were in disarray, but then continued to approve loans and modifications for Ruiz.

The prosecution also noted there is a pattern to the activity – William Liddle would approve a loan, followed by a cash withdrawal by Ruiz, which would then be followed by a cash deposit, usually in the same amount as the withdrawal, by Rhonda Liddle into the Liddles’ personal account.

The court is currently recessed for lunch. Check back with Yuma Sun as this story continues to develop.

PHOENIX - Updated 10:21 a.m. - Both the prosecution and the defense rested today in the William and Rhonda Liddle AEA fraud trial.

Rhonda Liddle’s attorney made a motion that charges be dismissed against her for lack of evidence, but the judge denied the motion.

The courtroom is currently at recess.

Jury instructions will be given after the break, followed by closing arguments by the attorneys.

The Liddles face charges of conspiracy, fraud and money laundering in a case that resulted in millions of dollars in bad loans for the credit union and led to its insolvency.

Check back with YumaSun.com for updates as this story continues to develop.