In what could be characterized as one of the most remarkable bank fraud cases in the history of Nebraska, the estate of the late Lincoln businessman Aaron Marshbanks faces certified claims exceeding $30 million. Marshbanks, aged 45, was found unresponsive in his car on November 2 in a downtown Lincoln parking garage. His situation raised questions about the authenticity of his business dealings, as he allegedly duped banks into issuing loans secured by non-existent financial assets.
The recent legal developments have revealed a multifaceted situation that extends beyond the surface of a conventional fraud case. While the claims certified against Marshbanks’ estate reflect a staggering sum, they are compounded by additional claims tied to loans secured by rental properties. These secondary claims, amounting to $22 million, have been partially resolved through real estate transactions, including the sale of properties like a half-finished luxury home and a unique structure known as a ‘barndominium.’
However, the assets recovered so far, which amount to only about $318,000, represent approximately a one percent of the owed claims, still outstanding to 15 banks and savings and loans. This leaves financial institutions, a business partner, and the University of Nebraska Medical Center facing significant losses. As Ed Hotz, the Omaha lawyer assigned by a judge to find remaining assets of the estate to pay off creditors, said, “This is a unique case.” “We’re not quite sure what all the assets are,” he added.
Hotz is investigating potential cryptocurrency holdings and other unconventional assets that Marshbanks might have concealed.
The complexities deepen with a legal dispute over life insurance proceeds. Approximately $3.5 million from life insurance policies is under scrutiny due to a beneficiary designation discrepancy. Marshbanks’ widow and a trust are both reported to be vying for these proceeds, while questions linger about potential fraudulent use of funds for premium payments.
This case raises important questions about how a well-regarded figure like Marshbanks managed to deceive numerous financial institutions. Despite his prominence as a former basketball star and charitable figure, he presented fabricated investment assets to secure loans, shaking the confidence of both the local community and lenders.
Further investigations have revealed the intricate web of limited liability companies (LLCs) Marshbanks established to facilitate his fraudulent activities.
A $2.25 million loan obtained by Marshbanks from the Valley bank in March was personally guaranteed by the Lincoln businessman and supposedly backed up by a limited liability company, Saige Ventures. But information provided proved to be false, said Woodbury, the chairman and CEO of First Nebraska Bank of Valley in December. “We checked out all the right places, but at the end of the day it came back as fraudulent and fictitious,” he said.
Woodbury’s bank was among several that have filed court claims in recent days seeking payment of unpaid loan balances of $1 million to more than $4 million.
“Bankers are people too, and when these kinds of things happen, we feel violated,” explained Woodbury.
In addition, the scope of this case goes beyond Nebraska’s borders, involving financial institutions from Iowa as well. It underscores the need for vigilance in assessing collateral and ensuring the accuracy of financial statements. The impending federal criminal indictments against Marshbanks’ financial adviser, Jesse Hill, who is facing probable federal indictment in one of the state’s largest cases of bank fraud, only deepen the ramifications of this case.
As creditors continue to pursue repayment and the legal battles play out, the full extent of the assets hidden by Marshbanks remains uncertain. The road to recovery is long, but as the attorney Ed Hotz states, efforts are ongoing to identify, collect, and return assets to the rightful claimants. The story of Aaron Marshbanks serves as a stark reminder of the need for thorough due diligence and safeguards within the financial industry to prevent such incidents from occurring in the future.
