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Ruiz testifies on checks, land deal as AEA fraud trial continues
PHOENIX — updated 8 p.m. - Businessman Frank Ruiz described on the stand Friday how he made thousands of dollars in cash payments to William Liddle and his wife, Rhonda, who are on trial for 68 counts of money laundering, conspiracy and fraud.
Ruiz is the second witness to take the stand for the federal government in the case against the Liddles, who are being tried in U.S. District Court in Phoenix. Liddle is the former business loan manager for AEA Federal Credit Union.
Until he entered a plea agreement in June, Ruiz was a co-defendant in the case in which it was alleged he gave the Liddles more than $1 million in cash, a home and cars in a kickback scheme to obtain $22 million in bad debt from AEA that led to its insolvency.
On Thursday, Ruiz testified how he purchased a home at Liddle’s direction, which the Liddles then moved into but paid only three months of rent.
His testimony Friday centered on the cash payments he made to the Liddles. Over the course of nearly three years from 2007 to 2009, Ruiz said, Liddle arranged for him to receive numerous checks of several thousand dollars each, drawn on Ruiz’s various business loans with AEA. Ruiz said he would then either cash the checks or deposit them in his personal account, getting cash in the form of $100 bills. He would then deliver the cash to Liddle or occasionally to his wife.
Ruiz said he did not owe the Liddles money and the money was not a loan. There were no receipts or documentation of the cash transaction and he did not keep an account because, he said, Liddle didn’t want a paper trail.
The first few times, Ruiz said, Liddle told him he was strapped for money, but then offered no explanation for his continued requests for cash.
Ruiz said he never pressed for repayment because he didn’t expect it and “it wasn’t my money.”
At one point, Ruiz said, he obtained a written promissory note signed by both Liddles but the document contained no amount or interest rate. Ruiz kept the note on file in his office for one of his businesses, Desert Best Distributing.
One time while he was out of town on vacation, his office was broken into and the note disappeared, and his personal belongings were packed up, Ruiz said. While gone, Ruiz said, he also got a phone call from Liddle telling him Ruiz’s partner Shelby Carl didn’t want to work with him anymore.
At the time, Ruiz said, he had not had a falling out with Carl, but shortly after that they split up their businesses.
Ruiz also testified that he paid for a vintage Corvette that Liddle had purchased for his wife with a wire transfer of nearly $10,000. He described other wire transfers as well, of money from Ruiz to Liddle.
In September 2009, Ruiz said, one of his entities, CTW LLC, took out a loan for $573,000 to purchase downtown property known as the Long Bar from Desert Capital Partners owned by Dan Thelen. Ruiz said Liddle told him it would be a good investment and that it would also benefit Ruiz’s plans to develop a nightclub in the Kress building next door.
Less than three months later, the loan had been modified to $2.25 million. It was a modification Ruiz said he did not request.
On another occasion, Ruiz said Liddle convinced him to take out a $1.6 million loan to purchase about 40 acres of farmland next door to the first phase of Tuscan Ranch, a subdivision being developed by Realtor Todd Burch. Eight months later, Ruiz sold the land to Burch for a $98,000 profit. Burch hadn’t purchased the land initially because he had too much debt, Ruiz said Liddle told him.
After Ruiz split with Carl, he said, his once-close relationship with Liddle cooled.
When Liddle terminated his job at AEA in late 2009, Ruiz said, he received a phone call from Liddle, who told him, “Hey buddy, just make sure if you do anything against me, I’ll make sure you go down with me.”
At 2 p.m. Friday, U.S. Attorney Peter Sexton ended his questioning and David Eisenberg, Liddle’s defense attorney, began his cross-examination.
Eisenberg noted that Ruiz had entered into a plea agreement and agreed to testify against the Liddles in hopes of receiving a lighter sentence when he is sentenced after the trial ends.
Eisenberg then turned to Ruiz’s earlier work history and noted that Ruiz had developed a career as a salesman.
After 45 minutes of cross-examination, court was recessed. It will reconvene Tuesday morning with Ruiz still on the stand.
PHOENIX - Updated 4 p.m. - The defense has started the cross-examination of Frank Ruiz, focusing on how Ruiz was testifying against the Liddles in the hopes of a plea deal.
Defense attorney David Eisenberg also questioned Ruiz on his background as a salesman.
The court has adjourned for the day, but will reconvene Tuesday morning.
PHOENIX – 12:15 p.m. update – Frank Ruiz wrapped up morning testimony with wire transfers, in which he was giving funds to William Liddle, or paying for items for Liddle, such as a car for Liddle’s wife, Rhonda. The wire transfers came from Ruiz’s CTW account.
Ruiz testified that he also used the account to pay bills for Liddle, such as his bill at the Yuma Country Club.
Ruiz testified that he was also depositing money into his account at the Foothills Bank, and then giving cash from that account to Liddle as well.
The court has adjourned for lunch. Check back with YumaSun.com as the trial continues for updates throughout the day.
PHOENIX - 10:58 a.m. update - Frank Ruiz is again on the stand today in the AEA fraud trial as the prosecution continues their questioning.
This morning, Ruiz testified that William Liddle had another business idea for him - to buy 40 acres of farmland next to the first phase of the Tuscan Ranch development, which could potentially be used as phase 2.
Ruiz testified that Liddle wanted him to buy the land, because the developer, Todd Burch, was maxed out on his debt.
About eight months later, Ruiz said he sold the land to Burch, and made $100,000 in profit.
In September 2011, Burch filed a lawsuit for $34 million against AEA, saying the credit union unfairly sued to collect on a capitalized loan and stopped his line of credit, forcing him into bankruptcy.
Testimony then turned to a series of checks that were drawn from Ruiz’ various AEA loans, which he then cashed in $100 bills and delivered to either Liddle or Liddle’s wife, Rhonda.
Most of the checks are for $3,000 to $5,000. Ruiz testified that Liddle said to keep the checks under $10,000 to avoid the attention of the Internal Revenue Service.
YumaSun.com will be posting updates from the trial throughout the day. Check back in as this story unfolds.
The trial in U.S. District Court in Phoenix is of William Liddle, former business loan officer for AEA, and his wife, Rhonda. 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.
Ruiz was also indicted in the case but reached a plea agreement in June.