Ruiz seeks to avoid serving prison time

If a request filed by his attorney this week is granted, Yuma businessman Frank Ruiz would not spend any time in prison for his role in the multimillion-dollar fraud of AEA Federal Credit Union.

The request, filed March 5 by attorney Ashley Adams, asks that Ruiz be sentenced to three years probation and community service.

Ruiz is scheduled to be sentenced Monday afternoon in U.S. District Court in Phoenix for his plea agreement in June 2011 to one count of conspiracy and one count of transactional laundering for his part in the misuse of AEA funds. He originally faced 68 counts.

Under the terms of his plea agreement, Ruiz could be sentenced to up to 15 years in prison. However, the federal government has recommended that Ruiz be sentenced to a lighter sentence of 12 months in prison followed by three years of supervised release because of his cooperation in the successful prosecution of co-defendants William and Rhonda Liddle.

A jury on Feb. 10 found Liddle, former vice president of business loans for AEA, guilty of 54 counts of conspiracy, fraud and money laundering in the case that cost AEA millions of dollars and contributed to its solvency. His wife, Rhonda, was found guilty of 36 counts.

Sentencing for the Liddles has been scheduled for May 21. In the meantime, Rhonda Liddle's attorney has filed a motion for mistrial.

The government's recommendation of 12 months in prison for Ruiz outraged Thomas Martin, president and CEO of AEA.

In a scathing letter to Ann Birmingham Scheel, acting U.S. attorney for the District of Arizona, Martin wrote: “Yesterday all of Yuma, Arizona, learned that, without a doubt, white collar crime really DOES pay.”

He wrote that he is “incredibly disappointed with the government's sentencing recommendation” for Ruiz. Martin wrote he is further disappointed that he learned about the recommendation through a newspaper article even though he is the representative for AEA, the victim in the case.

“I am angry that I was repeatedly assured during the trial that Frank Ruiz would be looking at 7-10 years behind bars, then was blindsided with the government's recommendation of just twelve months.”

Martin noted that his staff collectively spent more hours preparing for the case than Ruiz would spend behind bars for the crime.

“Bill Liddle worked diligently over a 5-year period to systematically steal over $50 million from AEA Federal Credit Union, and Frank Ruiz was a willing partner,” Martin wrote.

He noted that the unpaid principal balances of loans made to Ruiz or guaranteed by him, less anticipated recoveries from the sale of assets acquired, came with a price tag of more than $18.9 million. Just over $900,000 can be accounted for through actual expenses, according to the government's own sentencing recommendation.

That leaves more than $18 million unaccounted for, Martin wrote. “Where did the rest of the money go?”

Yes, Martin wrote, “Never ONCE has (Ruiz) apologized or appeared even remotely remorseful for his actions.”

The sentencing memorandum filed by Adams on behalf of Ruiz paints a different picture of her client, describing him as a father, husband, family man and decorated Vietnam War hero who “comes before this court with the life he once knew shattered.”

The memorandum states that Ruiz “acknowledges that he was unjustly enriched by his willingness to be a pawn.” But he has already been severely punished for “the foolish choices he has made,” saying that he has “lost his businesses, his once-stellar reputation in the community, his home and possibly his marriage.”

The document concludes that prison would not be appropriate in the case and that “the government agrees (Ruiz) sorrow is heartfelt and genuine.”

Joyce Lobeck can be reached at jlobeck@yumasun.com or 539-6853. Find her on Facebook at www.facebook.com/YSJoyceLobeck or on Twitter at @YSJoyceLobeck.
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Editor's Note: This is the text of the letter sent by Thomas Martin, president and CEO of AEA, to Ann Birmingham Scheel, acting U.S. attorney for the District of Arizona, in response to the recommended sentencing guidelines for Frank Ruiz. Click here to read the document as it was submitted to the court.

Honorable Ms. Scheel,

Yesterday all of Yuma, Arizona learned that, without a doubt, white collar crime really DOES pay.

I am incredibly disappointed with the government's sentencing recommendation for Mr. Frank Ruiz as a result of his guilty plea in the above cited case. I am disappointed that as the representative for the victim I had to read about the sentencing recommendation in the newspaper. I am angry that I was repeatedly assured during the trial that Frank Ruiz would be looking at 7-10 years behind bars, then was blindsided with the government's recommendation of just twelve months. And I'm disgusted that my staff collectively spent more hours over the past 24 months PREPARING for this case than Mr. Ruiz will actually spend behind bars BECAUSE of this crime—truly mindboggling.

Loan losses related to the illicit actions of Mr. Ruiz significantly contributed to the write-down of over $50 million in AEA FCU member equity, equity built up by (and belonging to) AEA members over the past 70 years. These losses were DIRECTLY related to the $50 million in fraudulent loans involved in the kickback scheme in which Mr. Ruiz played an integral part. He was NOT (as stated in the sentencing recommendation) and is not an “uneducated and unsophisticated businessman.” He is not “humble…contrite… or diffident.” During the entire course of the investigation and court proceedings, Mr. Ruiz remained loud, brash and cocky while holding court in his Yuma nightclub on a nightly basis—a nightclub purchased with illicit funds stolen from AEA Federal Credit Union—and a nightclub through which millions of additional dollars in fraudulent loans were laundered and never accounted for.

Frank Ruiz was not a poor, destitute pawn in Bill Liddle's scheme to defraud AEA, as stated in Section D of the sentencing recommendation—he was an active, willing participant. Frank Ruiz knowingly received millions and millions of dollars in fraudulent loans, and in return kicked back just over $1 million to Bill Liddle. Bill Liddle worked diligently over a 5 year period to systematically steal over $50 million from AEA Federal Credit Union, and Frank Ruiz was a willing partner.

The unpaid principal balances of loans made to Mr. Ruiz or guaranteed by him, less anticipated recoveries from the sale of assets acquired, came with a price tag of $18,941,151. According to the government's own sentencing recommendation, just over $900,000 can be accounted for through actual expenses. That leaves over $18,000,000 unaccounted for. $18,000,000!!! Where did the rest of the money go? It certainly didn't just vanish into thin air, as the government apparently believes—Frank Ruiz is laughing all the way to the bank.

And finally, Frank Ruiz's actions as a co-conspirator in this case are not “out of character”, as stated in Section C of the sentencing recommendation document. Throughout these court proceedings, Mr. Ruiz remained unapologetic for his actions. Since entering his guilty plea, Mr. Ruiz's public and private conduct have continued to negatively impact AEA Federal Credit Union's financial condition. Rather than cooperate and try to repay his debts, and rather than allow AEA to quickly take possession of and liquidate its collateral to mitigate losses, Mr. Ruiz tied up his assets in bankruptcy. He failed to turn over properties and continuously resisted efforts by AEA to recover and liquidate what little collateral existed.

Frank Ruiz additionally pocketed hundreds of thousands of dollars in rental income and revenue from his properties over the course of the investigation (a period covering almost 24 months)—never ONCE making a loan payment to AEA in that time—and then cost AEA additional hundreds of thousands of dollars in legal expenses to acquire and liquidate those properties. Never ONCE has he apologized or appeared even remotely remorseful for his actions. These are not the actions of a humble, contrite, uneducated man—in fact he's exactly the opposite.

When a thief is instrumental in the systematic theft and laundering of over $50,000,000 and then gets their sentence reduced to a literal slap on the wrist merely by cooperating with authorities once caught, is it any wonder our legal system is choked with white collar criminals eager for their turn at the feeding trough?

The community of Yuma, Arizona is outraged, and rightfully so.

Respectfully submitted,

Thomas J. Martin

President & CEO

AEA Federal Credit Union