Liddles responsible for $25 million restitution
Under a deal agreed to by all parties, the former business loan chief at AEA will be responsible for $25 million restitution to the one-time $410 million credit union that was almost sunk by a major loan fraud he engineered.
The restitution, the biggest ever for credit union theft, will obligate William Liddle to begin making payments to the credit union once he completes a 15-year prison sentence. His wife, Rhonda, was sentenced to 12 months of house incarceration so she can care for the couple's two daughters, ages 9 and 15.
Frank Ruiz, a Yuma businessman who paid Liddle more than $1 million in bribes to obtain millions of dollars in risky loans, was ordered to pay 25 percent of the restitution total, or $6.3 million. Ruiz will serve two years behind bars for his role in the case.
The restitution represents AEA's projected net loss of approximately $25 million as a result of the fraud case.
Due to the losses, AEA was placed under conservatorship in December 2010 by the National Credit Union Administration.
The restitution agreement was reached this week by the United States and the three defendants.
U.S. District Judge Susan Bolton issued an order to amend the judgment and commitment orders of the defendants to reflect the restitution stipulation. She also ordered that a restitution hearing scheduled for this coming Tuesday be vacated.
As part of the agreement, the first $5 million in restitution is to be paid to CUNA Insurance Society, which paid out a $5 million bond claim to AEA. All remaining payments are to go to AEA.
But it is doubtful that AEA or CUNA will see any money as the Liddles and Ruiz filed for Chapter 11 bankruptcy, and William Liddle and Ruiz are facing prison.
Liddle was convicted in February on 54 charges of bank fraud, conspiracy and money laundering for approving more than $30 million in fraudulent business loans to Ruiz and others for projects that ended in bankruptcy and foreclosure. His wife was found guilty of 36 counts.
Ruiz, who cooperated in the prosecution of the Liddles through a plea agreement, confessed to giving Liddle more than $1 million worth of bribes, including $565,000 to buy a home, a membership at the Yuma Golf & Country Club, $40,000 to buy a Toyota Sequoia, $9,600 to buy a Corvette and $246,200 in cash.
Ruiz obtained the loans to develop the Kress building and Yuma Fun Factory and for other businesses that all failed. The Fun Factory was later sold at a loss to AEA of $4.7 million, according to a court document. The Kress recently was acquired by AEA in a trustee sale.
In a court document filed by the United States, it was noted that restitution requests by certain commercial vendors to the court are not included in the stipulation and are still subject to a ruling by the court. These “indirect victims,” as they have been referred to by the court, were contractors and suppliers who lost hundreds of thousands of dollars due to the failed projects.