Sentencing for Ruiz continued until April 9 in AEA fraud case

BY JOYCE LOBECK

@YSJOYCELOBECK

PHOENIX — Yuma businessman Frank Ruiz will have to wait a bit longer to find out how much time he will spend in prison for his part in a fraudulent scheme that cost AEA Federal Credit Union millions of dollars.

U.S. District Court Judge Susan Bolton, clearly unhappy with new information about the scope of losses suffered by AEA through Ruiz’s involvement, has postponed his sentencing until April 9 to have time to go over the new evidence.

Ruiz was to have been sentenced by Bolton on Monday afternoon on one count of conspiracy and one count of transactional money laundering he pleaded guilty to in a plea agreement in June 2011 in U.S. District Court in Phoenix.

Under the terms of his agreement, he could have been sentenced to up to 15 years in prison. However, the government has asked that he receive only 12 months in prison and three years of probation because of his assistance in the successful prosecution of co-defendants William and Rhonda Liddle.

All three had originally been indicted on 68 counts of conspiracy, money laundering and fraud in the misuse of AEA funds that led to its insolvency. William Liddle, former vice president of business lending for AEA, recently was found guilty of 54 counts and his wife was found guilty of 36 counts. They’re to be sentenced May 21.

"Frankly, I’m perplexed," Bolton said Monday about evidence she’s only now hearing on the true amount of unjustified loans acquired by Ruiz and the scope of losses AEA suffered for which she believes Ruiz should be held accountable.

In its request that Ruiz receive a lighter sentence for his cooperation, the government attributed a little over $900,000 in losses to Ruiz, saying that the bulk of the some $50 million in fraudulent loans were shuffled by Liddle among other borrowers

Furthermore, Ruiz’s attorney, Ashley Adams, argued before Bolton that most of the loans to Ruiz were also signed by his former partner, Shelby Carl. Adams also argued that Ruiz "assumed others at AEA knew what was going on. He did benefit, but he should not be held responsible for the losses by AEA, just the money he took."

Bolton fired back that "I’m not going to buy that for one minute. It was a Ponzi scheme nearly from the beginning."

She continued, "Ruiz should be held accountable for more losses. This doesn’t take into account the numerous expenditures that should not have been made."

And there was little or no likelihood that the money would be paid back, she said.

Bolton also rejected the argument that Carl and his reportedly wealthy wife, Margaret, should be held responsible for the losses AEA suffered through Ruiz’s activities.

The judge said she hasn’t seen a "single piece of paper" that indicates Carl has a significant amount of money, nor has she seen one loan document with Margaret Carl’s signature on it. Bolton noted that Carl wasn’t even involved in some of the entities Ruiz owned.

There were some 30 people in the courtroom Monday, among them AEA officers, friends of Ruiz who spoke on his behalf and a woman who said she and her husband suffered great financial harm from Ruiz’s failure to pay them for work their business did on one of Ruiz’s projects.

An emotional Cindy Keck related how she believes the financial stress contributed to the death of her late husband, Mike, when their plumbing and electrical company, Demco, wasn’t paid for work it did on Top of the Kress. She said Demco is owed $232,000 plus interest for expenses it incurred on the job that were not paid despite a signed contract.

"AEA is not the first victim," Keck said. "Your honor, I respectfully ask that you order any restitution or recovery for this crime to go first to those of us who were taken advantage of by Mr. Ruiz and his willing partner in crime, AEA Federal Credit Union."

Harvey Campbell, who identified himself as Ruiz’s brother-in-law, described him as a Vietnam veteran, "a good person" with a warm heart who created jobs and has now "lost everything."

Doug Hipp, who said he knew Ruiz professionally and as a friend, said he was always paid in full by Ruiz.

He said Ruiz was not an extravagant man, but one who went out of his way to help others.

"He’s an honorable man. This country owes him a debt."