After a two-week trial that included several witnesses testifying against each other, a jury found William Liddle, a former loan officer at AEA Federal Credit Union, guilty of several counts of fraud and money laundering.
The verdict came late on Feb. 10 at a U.S. District Phoenix courthouse with testimony from Liddle in his own defense.
The jury found Liddle guilty of 44 counts of federal credit institution fraud, 14 counts of misapplication of financial institution fraud, six counts of transactional money laundering, three counts of wire fraud and one count of conspiracy.
Liddle’s wife, Rhonda, was found guilty of 30 counts of federal credit institution fraud, five counts of money laundering and one count of conspiracy.
The Liddles are scheduled to be sentenced May 21.
Frank Ruiz, an Arizona business man who worked with Liddle on several business projects, previously pleaded guilty. He testified against the Liddle and his wife. He is scheduled to be sentenced March 12.
During his time at the credit union, Liddle approved more than $25 million in business loans, according to the indictment from a Phoenix federal grand jury.
Liddle, his wife and Ruiz, were arrested in December 2010 for their roles in approving questionable AEA business loans in exchange for nearly $1 million, according to the Arizona Office of the United States Attorney.
During the recent trial, Liddle testified that his wife did not have any finance, accounting or business management training, never met with Ruiz, did not have access to AEA’s files and only visited the credit union to bring birthday presents to staff members’ children, the Yuma Sun reported.
Liddle also said that AEA had to put aside more funds to cover expected losses stemming from auto loan delinquencies and chargeoffs. He notified Ken Bredemeyer, who was AEA’s president/CEO at the time, of new loans and loan modifications on all but the smallest loans before approving them, the publication reported. Liddle said Bredemeyer told him to increase business loans, which led to approving some he had previously rejected.
Due in large part to the impact of Liddle’s loan activity, AEA was placed in conservatorship by the NCUA in December 2010. John Zimmerman, NCUA public affairs specialist, said since the agency is still overseeing the credit union, it will not comment on the case.
According to its latest NCUA Call Report data, AEA received a $20 million subordinated note. The liability, shares and equity page of the report dated Jan. 27, showed the note was deposited in December 2011 and includes unsecured secondary capital. Subtracting the note from AEA’s balance sheet appears to push its net worth to negative 6.6%.
The NCUA placed the $230 million, 42,000-member AEA in conservatorship due to inadequate capital, insufficient earnings and a financially troubled loan portfolio, the agency said at the time.
As of August 2011, AEA had posted a year-to-date net income of $2.2 million, according to the NCUA. The regulator touted a number of improvements, including streamlined operations, improved facility management practices and positive progress in business loan delinquency.