Govt claims Ruiz responsible for $4.75M in losses

Yuma businessman Frank Ruiz returns to court Monday afternoon to learn how much time he will spend behind bars for his part in a fraudulent scheme that cost AEA Federal Credit Union millions of dollars and drove it into insolvency.

Meanwhile, the U.S. government, which has prosecuted the case, has revised its calculation of loss attributed to Ruiz from its original estimate of $900,000 but still stands by its recommendation that he only serve 12 months in prison. The revised loss amount now is $4.75 million, according to the government's supplemental sentencing memorandum.

Even with the higher loss amount, “given Ruiz's level of cooperation in this matter, the United States requests that this court sentence defendant to 12 months in prison followed by three years of supervised release,” the memorandum states.

Ruiz's attorney, Ashley Adams, supports the government's request that her client receive no more than a year in prison, saying that he “was not the architect or operator behind the pyramid lending scheme.”

She does, however, dispute the government's upward adjustment of losses attributed to her client, saying $1.96 million more adequately represents Ruiz's true role in the conspiracy.

The government's loss revision came after U.S. District Judge Susan Bolton took exception to the government's earlier view of the amount of AEA's loss for which Ruiz should be held accountable.

A year ago, Ruiz had pleaded guilty to one count of conspiracy and one count of money laundering for which he could be sentenced to up to 15 years in prison and a maximum of $500,000 in fines. However, the government has recommended the one-year sentence because of Ruiz's assistance in the government's prosecution of codefendants William and Rhonda Liddle.

All three had originally been indicted on 68 counts of conspiracy, fraud and money laundering for the misuse of AEA funds. Ruiz was a key witness against the Liddles in their trial in Bolton's courtroom in the U.S. District Court in Phoenix. William Liddle, former vice president of business lending for AEA, was found guilty in February of 54 counts and his wife was found guilty of 36 counts. They're to be sentenced May 21. The government had dismissed the other 14 counts.

Ruiz was to have been sentenced on March 12, but Bolton continued the hearing after learning about the true amount of unjustified loans acquired by Ruiz and the scope of losses AEA suffered for which she believes he should be held accountable. Ruiz obtained an estimated $22 million in loans from AEA as the developer of Yuma Fun Factory and Top of the Kress and for other businesses in which he was involved.

In its memorandum, the government acknowledges that Ruiz “was not a good credit risk for much, if not all, of what he borrowed.” However, the government claims that much of his debt was shared by his former business partner or was transferred to other debtors and therefore should not be held against Ruiz.

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.