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News Now

CU System
Developer appeals dismissal of suit vs. conserved CU
YUMA, Ariz. (3/19/12)--A Yuma, Ariz., real estate developer is appealing a federal judge's dismissal of his breach of contract lawsuit against Yuma-based AEA FCU, which is under conservatorship by the National Credit Union Administration (NCUA).

An attorney for Todd Burch, who is seeking $34 million from the credit union, filed a motion to appeal the lower court's decision to the U.S. Court of Appeals for the Ninth Circuit (YumaSun.com March 15).

On March 6, U.S. District Judge Frederick Martone had denied the suit, rejecting Burch's bid to prevent NCUA from selling his real estate projects and letting stand AEA's counterclaims to receive money the credit union says is owed by Burch.

Burch, who is developer of a housing subdivision and an assisted-living condominium, filed a lawsuit on Sept. 22, alleging fraudulent misrepresentation , breach of contract and defamation.  It alleged that AEA FCU cut off  his line of credit and sued him to collect on his loan even though the credit union's loan officer promised it would continue to fund his projects. Burch filed for bankruptcy in the spring of 2010 with an estimated debt of $17.5 million, said the Sun.

William Liddle, the credit union's former vice president of lending, recently pleaded guilty to more than 50 counts of fraud related to his role in an alleged $50 million kickback scheme that led to loan portfolio problems that prompted the conservatorship by NCUA.  Another real estate developer, Frank Ruiz, pleaded guilty in June to one count of conspiracy and one count of transactional money laundering for receiving millions of dollars in fraudulent business loans from Little (Yuma Sun March 12).

AEA FCU, with $229 million in assets, was placed into conservatorship in December 2010 after the fraudulent loans were discovered.  Last August, NCUA said the credit union's financial situation was improving (News Now Aug. 3).


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