Arizona CU Rocked by Business Lending Fraud
AEA Federal Credit Union in Yuma, Ariz., announced today it has been notified that the FBI has filed criminal charges with the U.S. Attorney's Office alleging fraudulent actions on the part of its former vice president of business services.
The $309 million CU said William (Bill) Liddle was involved in alleged unlawful actions while he was working for AEA. According to a statement from the CU, Liddle was hired by AEA in November of 2004 to develop and manage a business services program based on his formal education and professional expertise in commercial lending and international business. Liddle resigned from his position in December of 2009 to manage his business, Desert Capital Advisors LLC.
AEA said inconsistencies detected following Liddle's departure prompted an audit of business lending activities conducted by an executive committee appointed by AEA officials.
"The committee's research into certain specific borrower's loans revealed numerous infractions by Mr. Liddle of AEA's policies and procedures which substantially impaired AEA's business loan portfolio," the CU said. "It is believed that alleged actions of Mr. Liddle were structured to elude detection by both internal and external auditing entities."
Denise Sweet-McGregor, interim CEO of AEA, said, "While we cannot formally comment on Mr. Liddle's guilt or innocence at this time, we strongly believe the facts will bear themselves through the judicial process."
AEA business loan losses caused a drop in capital, prompting the NCUA to require preparation of a five-year net worth restoration plan, Sweet-McGregor said. The CU also had to close one branch and reduce staff by more than 35%.
"Without the alleged fraudulent and reckless behavior which contributed to the majority of our business loan losses, AEA would have navigated this economic recession relatively unscathed," Sweet-McGregor said. "We now need to move beyond this unfortunate situation using what we have learned to grow stronger for our members. The current strategies we have put in place are a positive first step."