In the latest update involving AEA Federal Credit Union, a judge has rejected claims from a real estate developer that the NCUA-conserved cooperative is still responsible for funding his projects.
Todd Burch was seeking $34 million against the Yuma, Ariz.-based AEA for alleged breach of contract, claiming that the credit union severed his line of credit and filed suit against him to collect on his loan, the Yuma Sun reported in a March 15 article. Burch’s debt is an estimated $17.5 million.
On March 6, U.S. District Court Judge Frederick Martone rejected Burch’s move to block the NCUA from selling off his projects, according to the Yuma Sun.
Robert Cook, Burch’s attorney, said the AEA loans were in violation of federal limits on loans to one borrower of 10% of the credit union’s stated capital, the publication reported.
Burch claimed that AEA cut his credit line because the credit union was experiencing financial troubles and could not provide further funds to complete his real estate projects.
Cook said he will appeal the judge’s decision.
Martone allowed AEA’s counter claims to recoup funds that Burch allegedly still owes the credit union to remain in place. An April 20 scheduling conference is set to further address that matter.
In a separate development, Frank Ruiz, a real estate developer involved in a business lending kickback scheme that led to the collapse of AEA, could receive up to 15 years in prison for his role.
Prosecutors said Ruiz should receive a sentence of up to one year because he testified against William Liddle, the AEA loan officer, who recently pleaded guilty to more than 50 counts of fraud for his role in the $50 million kickback scheme.
U.S. District Court Judge Susan Bolton postponed Ruiz’ sentencing until April 9 to consider new evidence on how large of a role he played in AEA’s financial downfall.
Meanwhile, Liddle’s wife Rhonda, was set to receive an extension March 21 that would possibly grant her a new trial. According to the Yuma Sun, the extension was needed to complete a review of trial testimony.
Liddle’s attorney, Mark Paige, filed a motion for mistrial saying that remarks by a federal prosecutor during the government's closing argument were misleading, the publication reported.
“In this case, the government's remarks at the very close of its rebuttal argument were misleading at best,” read the motion, according to the article. “Government counsel, while knowing that Rhonda did in fact challenge the accusation made by [FBI agent Joseph] Montoya to her conduct, argued to the jury that Rhonda never made such a challenge. The inference to the jury was that, in failing to dispute the allegations, Rhonda demonstrated a consciousness of guilt.”
This implicated her right to remain silent and shifted the burden of proof to the defendant, the motion stated.
Bolton has said that she will need more time to go over the amount of financial damage that AEA suffered as a result of Ruiz’s actions. In a March 12 Yuma Sun article, she told the publication that she is perplexed about evidence she’s only now hearing on the loans acquired by Ruiz.
On Feb. 10, Liddle was found 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.
John Zimmerman, NCUA public affairs specialist, said the agency will not comment on Ruiz’s possible sentence.
AEA has been operating under NCUA conservatorship since December 2010.
Prosecutors argued that Ruiz should receive a lighter sentence because AEA losses that he was involved in were a little over $900,000 while Liddle had a hand in the majority of $50 million in fraudulent loans.
Ruiz’s attorney Ashley Adams said most of the loans to her client were signed by a former partner, the Yuma Sun reported. Adams said Ruiz should be held accountable but not to the extent of Liddle.