Claims against estate of deceased Lincoln businessman now extend to Louisiana

Editor’s note: This story has been updated to include lawsuits naming financial adviser and an effort to appoint a new representative of the estate.

LINCOLN, Neb. (Nebraska Examiner) — Claims against the estate of deceased Lincoln businessman Aaron Marshbanks now extend to New Orleans, and include some properties in Wyoming.

A group of banks allegedly defrauded by Marshbanks requested Tuesday that a Lincoln attorney, Edward Hotz, be named administrator of the estate after indicating that both Marshbanks’ widow and an alternate are declining to serve in that role.

And Marshbanks’ financial adviser, Jesse Hill of Hickman, Nebraska, has been named in three civil lawsuits filed by financial institutions alleging fraud and intentional misrepresentation in obtaining loans.

Those are the latest developments in a widening scandal in which more than 20 Nebraska and Iowa banks claim that they were defrauded out of more than $45 million in loans. That would make it one of the largest cases of such fraud in state history.

On Friday, Omaha attorney Thomas Anderson filed claims against Marshbanks’ estate in Lancaster County Court on behalf of three people who were partners with him in the purchase and rehabilitation of rental properties in Louisiana and Nebraska.

The creditors are seeking payment of a total of $393,609 in equity on 31 properties, including nine in New Orleans and two in Arabi, Louisiana.

Twenty other properties were located in Lincoln and Omaha. Court records indicated that eight were vacant and five were “upside down,” which means more is owed on a property than it is worth.

Claims exceed $45 million

Claims against the estate of Marshbanks, who was found dead Nov. 2 in a downtown Lincoln parking garage, now exceed $45 million from banks, savings and loans and credit unions that maintain in court filing that they were victims of fraud.

And, it was recently learned, Marshbanks’ financial adviser, Jesse Hill, has been named in three lawsuits filed recently by banks seeking payment of loans in default.

The lawsuits were filed by Nebraska Bank of Commerce of Lincoln, First Nebraska Bank of Valley and Access Bank of Omaha. Each bank alleged that Hill had attested that financial accounts he maintained for Marshbanks at First Sojo Capital had more than enough money to serve as collateral for loans of $500,000, $2.7 million and $1.5 million, respectively, issued in March and April.

Financial statements fabricated

The lawsuits claim that after Marshbanks’ death in November, it was discovered that the financial accounts did not exist. In two lawsuits, banks maintained that they had been provided fabricated statements indicating, falsely, that the financial accounts provided as collateral held between $6 million and $7 million.

“Hill and First Sojo had actual knowledge of the falsity of their representations or made the representations with reckless disregard for the truth of the representations,” stated the lawsuit filed by Nebraska Bank of Commerce.

Hill did not return a phone call Wednesday and has not returned multiple phone calls since the Nebraska Examiner first reported on the case on Dec. 2.

Bankers have said they were “blindsided” when it was discovered that collateral posted for some of the loans, supposedly in investment accounts, did not exist.

What happened financially to Marshbanks, 45, a former star basketball player at Lincoln Christian High School, is unclear. Lancaster County property records indicate he had been purchasing multiple residential properties for at least the past decade.

And recent lawsuits indicate that he had registered at least five limited liability corporations and one for-profit venture, named Heavy Ventures, Inc., in Wyoming in 2021. The nature of the businesses was not listed in records kept by the Wyoming Secretary of State’s Office.

State, FBI are investigating

Both the Nebraska Department of Banking and the FBI are investigating the case, which included a recent search of the rural Hickman home of Hill, the financial adviser. The cause of Marshbanks’ death has been listed as undetermined. Toxicology tests are pending.

Last week, a Nebraska bank filed an amended claim against the estate seeking payment of a $1.2 million loan to purchase and rehab nine properties in Lincoln, Omaha, Bellevue and Council Bluffs, Iowa.

First State Bank Nebraska of Lincoln, on Nov. 19, had filed a claim for more than $7 million owed on 47 loans taken out in June, July and August for properties that ranged from $104,000 to $216,000 each.

Another First State Bank Nebraska branch, this one in Ralston, also filed a claim last month against the Marshbanks estate for $715,382 in unpaid loan balances.

Partners in Louisiana loans seek payment

The recent claim on the Louisiana properties maintains that Marshbanks’ estate owes three other partners in a limited liability corporation registered in Louisiana, KMPK, a total of $275,960.

OnPath Federal Credit Union of New Orleans, court records indicated, loaned funds on those properties, which are appraised at $1.9 million. About $1.5 million was still owed on the loans, and KMPK had accumulated $413,810 in equity on the properties.

The other partners in the Louisiana LLC, according to court records, are Luke Kramer, Michael Kramer and Alexander Puente.

Michael Kramer was also listed as a partner in an LLC registered in Nebraska, MKAM, of which Marshbanks had a 50% stake.

A claim filed Friday seeks $117,750 in repayment from the estate of Marshbanks in relation to 20 properties in Lincoln and Omaha, purchased by MKAM LLC.

Four banks were listed as loaning funds for the properties: First State Bank, Cornhusker Bank, Western National Bank and Security First Bank. Those banks have all filed individual claims against the Marshbanks estate.

The lawsuits against Hill and his financial firm all state that the death of Marshbanks has resulted in the default of the loans, and the banks are demanding payment.

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