More than $25 million in alleged fraudulent loans authorized by William Liddle, the former vice president of business services at AEA Federal Credit Union, are now in default.
That's according to the Arizona Office of the United States Attorney. Liddle, along with his wife Rhonda, and Frank Ruiz, an Arizona businessman, were arrested Dec. 2 for their roles in approving questionable AEA business loans in exchange for nearly $1 million, the attorney's office said. Ruiz used the loans to fund his businesses, many of which are now bankrupt. The three persons have since filed personal bankruptcy.
In a Dec. 2 statement, U.S. Attorney Dennis K. Burke said "They have victimized not only a financial institution, but an entire community and jeopardized that community's faith in this institution. We will make sure they are also held accountable for their disregard of the law and the consequences suffered by the credit union."
The $309 million AEA FCU said it an 11-month investigation revealed several inconsistencies with business loans authorized by Liddle including actions to thwart internal and external audits.
According to the attorney's office, fraud convictions in this case could carry a maximum penalty of 30 years in prison, a fine of $1 million or both. A district judge could adjust those guidelines.
"Financial institutions are not personal fun factories for its officers and their anointed business pals. The defendants' selfish scheme has come full circle and they are already paying a price for their greed," Burke said.
Denise Sweet-McGregor, interim CEO of AEA, said the credit union had to stay quiet during the investigation as rumors ran rampant about the financial institution's future.
"However, now that the information about the alleged illegal actions of Mr. Liddle and others has been released by the FBI, the community can now understand why AEA has had to bear such severe financial losses this past year. The harm caused by these alleged actions to AEA's members and dedicated employees is unconscionable."