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State investigating what could be Nebraska’s largest bank fraud

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State and local officials are investigating what might be Nebraska’s largest case of bank fraud related to loans obtained by a recently deceased Lincoln developer.

Claims by banks and other lenders against the estate of Aaron Marshbanks already total more than $30 million and may eclipse $50 million by the time all of the claims are filed, according to court documents and those familiar with the loans. More than 20 banks and savings and loans — from Omaha and Lincoln to Curtis and North Platte — are involved, as well as some credit unions.

Richard Baier, president and CEO of the Nebraska Bankers Association, said his members suspect it may be a case of “pretty sophisticated fraud” involving the use of several limited liability companies to obtain loans that court documents show were used as operating capital for Marshbanks' companies.

The same documents show that some of the loans pledged properties as collateral, but many were unsecured or secured using a separate investment or equities account.

“At this point, we welcome a comprehensive investigation and review of this issue,” Baier said.

Kelly Lammers, the director of the Nebraska Department of Banking and Finance, said his agency was investigating but offered no further information. At this time, he said, “it’s simply something we are reviewing.”

Both Lammers and Baier said that Nebraska banks remain financially strong. Baier said they should be able to weather any potential financial losses. But one banker said it was a “psychological blow” in a state where bankers expect customers to be honest.

“Bankers are people too, and when these kinds of things happen, we feel violated,” said Lydell Woodbury, the chairman and CEO of First Nebraska Bank of Valley.

His 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.

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, Woodbury said.

“We checked out all the right places, but at the end of the day it came back as fraudulent and fictitious,” he said.

Woodbury said his bank has contacted the Lancaster County Sheriff’s Office to ensure that someone is looking into the case.

“It’s just a very complicated and complex situation,” he added. “It’s going to take some time to figure out.”

While several of the loans were unsecured, and backed by investment accounts that didn’t have sufficient assets, others listed properties in Omaha, Lincoln, Bellevue and Ralston as collateral. Those will allow banks to recover most, if not all, of their financial losses. The unsecured loans will not.

Court records indicate that Marshbanks, a former star basketball player at Lincoln Christian High School, utilized several different limited liability companies to obtain loans, with names such as MKAM, CESH, Kingdom Golden Bullion, Tweed Capital, Saige Ventures and 1 Chronicle 29:11.

That last limited liability corporation refers to a Bible verse that reads, in part, “Yours, Lord, is the greatness and the power and the glory and the majesty and the splendor, for everything in heaven and earth is yours ….”

Marshbanks, the 45-year-old married father of four was found dead at about 5:30 p.m. on Nov. 2, in a parking garage in downtown Lincoln. A Lincoln police spokeswoman said his cause of death is not yet known, and while it is still under investigation, police said no suspects are being sought.

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The obituary in the Lincoln Journal Star stated that “his success centered around knowing God and loving people.”

Marshbanks was involved in several commercial and community endeavors, according to an internet search, including a duct-cleaning service, a charity produce stand, home construction and renovation of existing homes. He served on the Lincoln Christian School Board and for a time was the treasurer for the nonprofit corporation that operates the school.

Since his death, dozens of claims have been filed in Lancaster County Court against his estate seeking payment of loan balances. Several claims indicated that the loans became due upon Marshbanks' death.

The Omaha attorney for his estate, Brandon Hamm, did not return phone calls seeking comment Friday. A financial adviser who was working with Marshbanks, Jesse Hill of Hickman, also did not return phone and text messages.

Among the claims that have been filed in Lancaster County Court so far are:

* Lincoln Federal Savings and Loan filed a claim Nov. 29 for $3.73 million. Several homes were listed as collateral.

* Nebraska Bank of Commerce in Lincoln filed a claim Nov. 22 for $453,000. The loan was backed by an investment account at First Sojo Capital Group of Grit Capital, LLC. Hill is listed online as a financial adviser with First Sojo Capital Group of Hickman.

* Home Federal Savings of Grand Island filed a claim for $2.46 million unpaid on a $2.5 million loan taken out in January. Collateral was listed as J.T. Equity Fund. Hill is listed as president of a firm called J.T. Equity Trading.

* Western National Bank of Cairo filed a claim Nov. 25 for $5.4 million on a loan secured by several properties and unsecured. Several properties in Omaha and Bellevue were listed as collateral.

* Western Nebraska Bank of Curtis is seeking $1.83 million for secured and unsecured loans. Crunch Capital LLC was listed as backing the loan, with an address of 5200 N. 57th St., in Lincoln.

* First State Bank of Ralston, in a Nov. 15 filing, is seeking $715,000 repayment for an unsecured loan taken out in August for “business working capital.”

* United Republic Bank of Elkhorn filed a claim Friday for $2.85 million in unpaid balances for secured loans. The loans, which varied from $13,930 to $455,198, were secured by several properties in Omaha.

* Columbus Bank and Trust filed Nov. 18 for an unpaid balance of $2.3 million for an unsecured loan to Tweed Capital, LLC, in March. Marshbanks was listed as the guarantor of the loan.

Originally published on Nebraska Examiner, part of the TownNews Content Exchange.

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Originally published on nebraskaexaminer.com, part of the TownNews Content Exchange.

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