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Ruiz sentenced to 24 months in prison
PHOENIX — Frank Ruiz has been sentenced to 24 months in prison and three years’ supervised release for his role in the fraudulent case that cost AEA Federal Credit Union millions of dollars.
While describing Ruiz as a "willing pawn" in the costly fraud, U.S. District Judge Susan Bolton laid some of the blame on AEA.
"There was an unbelievable lack of control and financial accountability at AEA," Bolton said. "The trial made clear there was a lack of financial viability of millions of dollars in loans."
This doesn’t mean Ruiz’s conduct is any less criminal, the judge said, but AEA leadership should have known about and stopped the loans long before it did.
After hearing his sentence, Ruiz told the judge he "totally" accepts responsibility for he what he did. "I took a wrong turn."
Ruiz, who will turn 63 on June 4, is to voluntarily turn himself in to prison by June 29 after a restitution hearing for him and his co-defendants, William and Rhonda Liddle.
Where he will serve his sentence will depend on where the prison system has room for him at the time, said Bolton.
The judge indicated she wants the restitution hearing to be held in June but needs to consult with the Liddles’ attorneys before scheduling it.
Bolton based her sentence on the government’s revised estimate that Ruiz should be held accountable for $4.75 million in losses AEA suffered.
She also noted that Ruiz has no prior criminal history, and he gave "substantial" assistance to the U.S. government in its successful prosecution of William Liddle, whom Bolton described as the main architect in the fraudulent scheme during his tenure as the vice president of business lending for AEA.
In February a jury found William Liddle guilty of 54 counts of conspiracy, fraud and transactional money laundering. Rhonda Liddle was found guilty on 36 counts. They are to be sentenced in Bolton’s court on May 21.
Tom Martin, interim chief executive officer of AEA, questioned even the revised estimate of losses attributed to Ruiz.
"His actions caused AEA severe financial harm," he told the judge, noting that 81 employees lost their jobs and AEA has been in conservatorship since December 2010.
Martin said the government’s estimate of $4.75 million in losses "is just the tip of the iceberg," maintaining that even after Ruiz’s assets were liquidated, nearly $19 million in money he borrowed can’t be recovered.
Furthermore, Martin said, AEA continued to suffer losses of an estimated $50,000 to $75,000 a month in revenue from the Top of the Kress, which Ruiz continued to operate until Jan. 1 despite his plea agreement a year ago to one count of conspiracy and one count of money laundering.