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Witness: Efforts made to hide AEA loans
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.
UPDATED 10 p.m.- The trial in U.S. District Court in Phoenix of former AEA business loan manager William Liddle and his wife, Rhonda, took a dramatic turn Tuesday afternoon when the third prosecution witness took the stand.
The Liddles are on trial on 68 counts of conspiracy, money laundering and fraud in a case that cost the AEA Federal Credit Union millions of dollars and led to its insolvency.
Emma Almendarez, who had worked with Liddle at AEA, testified about the inner workings of the business lending department that Liddle managed until December 2009.
She testified that under Liddle’s direction, she provided inaccurate reports to the credit union’s board of directors from information provided by Liddle. At his direction, the reports did not include the many large loans made to Dan Thelen and Frank Ruiz, who eventually ran up about $25 million in bad loans.
Almendarez said that neither of them had the money to pay their loans so funds were taken from one account to pay another, always with the approval of Liddle. When Ruiz set up CTW LLC, it was seen as the answer to all of the problems he and Realtor Todd Burch were having as it became another entity to spread out the debt.
She also said that Ruiz had terrible credit and she was surprised that he was able to obtain so many loans. Ruiz made almost daily draws on his loans while Thelen also made frequent draws, she testified.
Almendarez also testified that a check printer located in the back of the department already had the signature of Ken Bredemeyer, who was president of AEA at the time. So all that needed to be done was put in the amount at Liddle’s direction when he ordered that a check be printed.
Liddle was the one who wrote up AEA’s business lending policy, Almendarez said. According to the policy, Liddle had full lending authority. She and Liddle were members of the business lending committee and often were the only ones to sign off on loans, especially to Thelen and Ruiz.
Almendarez went on to describe her relationship with Liddle. She said after she joined his staff, she was promoted several times, finally to director of business lending. Liddle was a groomsman in her wedding in February 2009 and paid for the reception. When her marriage failed, Liddle supported her and moved her into a home at Tuscan Ranch that was being developed by Burch.
“It was Bill’s idea so I could help Todd with sales,” she said. She lived there for six months without paying any rent, testifying that “Bill said he would take care of it. I believe the funds came through Desert Best Enterprises (an entity owned by Ruiz).”
She said she knows that because she had access to the check payment history.
At one point, she worked for Thelen for one week at Yuma Fun Factory but wasn’t paid, so Liddle gave her $1,000. On another occasion, he gave her a $3,000 gift while she was living at Tuscan Ranch.
Almendarez testified that Liddle would tell her: “Stick with me, kiddo, we’re going to be rich.”
She also testified that Liddle would make derogatory comments about the board members, saying they were “idiots.” He also joked about AEA officials Theresa Miller and Denise Sweet-McGregor, calling them “Lucy and Ethel” and saying they “didn’t know what they were doing.”
She and Liddle both resigned from AEA in December 2009. The month before, Liddle had resigned but then withdrew his resignation, Armendarez said. She testified that he told her he had first resigned because the auditors were there asking to see loan files, particularly those related to Thelen and Ruiz.
Both Ruiz and Thelen were also witnesses for the prosecution. Earlier Tuesday, Liddle’s court-appointed defense attorney, David Eisenberg, completed his cross-examination of Ruiz. Mrs. Liddle’s defense attorney did not cross-examine him.
Both testified that they got deeply in debt with millions of dollars in loans at the direction of Liddle, a man they said they considered a trusted friend. The loans were for a variety of businesses that ended in bankruptcy, among them the Yuma Fun Factory and Top of the Kress.
Ruiz was a co-defendant with the Liddles. In June, Ruiz entered a plea agreement and agreed to testify against his co-defendants in hopes of receiving a more lenient sentence. He faces a maximum of 15 years in prison.
UPDATED 3 p.m. - The trial in U.S. District Court in Phoenix of former AEA business loan officer William Liddle and his wife, Rhonda, resumed Tuesday morning with businessman Frank Ruiz still on the stand undergoing cross examination.
Meanwhile, U.S. Attorney Peter Sexton told the court the prosecution would rest its case on Thursday. Only two prosecution witnesses have been called, Ruiz and Dan Thelen. Both testified that they got deeply in debt with millions of dollars in loans at the direction of Liddle, a man they said they considered a trusted friend at the time. The loans were for a variety of businesses that ended in bankruptcy, among them the Yuma Fun Factory and Top of the Kress.
The Liddles and Ruiz were indicted on 68 counts of conspiracy, money laundering and fraud, with Ruiz allegedly giving the Liddles more than $1 million in cash, a home and cars in a kickback scheme to obtain $22 million in loans that went bad and led to AEA's insolvency.
In June, Ruiz entered a plea agreement and agreed to testify against his codefendants in hopes of receiving a more lenient sentence. He faces a maximum of 15 years in prison.
Last week, Ruiz had testified about receiving checks from his various AEA business loans, then making thousands of dollars in cash payments in $100 bills to either Liddle or his wife. He also testified that he had purchased a home at 1401 Parkway at Liddle's direction, which the Liddles subsequently rented but only made three rental payments.
In his cross-examination Tuesday morning, Liddle's court-appointed attorney, David Eisenberg, asked if anyone else was present when the cash payments were made or if Ruiz documented the money transfers. Ruiz's answer to both questions was no, to which Eisenberg suggested it was just Ruiz's word and reminded the court that Ruiz had a personal stake in testifying against Liddle.
Eisenberg also questioned Ruiz about the house he purchased. Ruiz responded that the house was purchased because Realtor Todd Burch and Liddle had said it would be a good investment. He also said the house originally was to provide a home in Yuma for his former business partner, Shelby Carl, as Carl was living in the Phoenix area and having marital difficulties. However, Carl reconciled with his wife and never lived in the home. Therefore, the Liddles moved in with the agreement they would pay $3,500 a month rent. Ruiz said he received three checks but never was paid cash for the rent.
However, Eisenberg presented documentation that Ruiz had said during a meeting with the FBI in November 2010 that he had received cash rental payments. Ruiz responded that he had gotten “scared” and changed his story.
Eisenberg is expected to complete his cross examination Tuesday afternoon. Then Mark Paige, defense attorney for Mrs. Liddle, will begin his cross examination.
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.