Legal battle over Nebraska’s largest case of bank fraud continues
A Nebraska court heard arguments on April 19 about the $3.6 million in life insurance proceeds following the death of Lincoln businessman Aaron Marshbanks. The court proceedings are the latest part of the legal battle in Nebraska’s largest case of bank fraud.
Marshbanks was 45 years old when he died on Nov. 2, 2022. He was found in a parking garage in downtown Lincoln. His official cause of death is an overdose and the Lincoln Police Department stated a suspected suicide note was found.
Following Marshbank’s death, over 20 banks and other financial institutions began to file claims against his estate, which have now totaled over $34 million. Marshbanks has been accused of fraud as the loans he took out were backed by investment accounts with insufficient assets.
In order to obtain the loans, Marshbanks presented financial statements showing over $6 million in an investment account. The banks now allege that the statements were fabricated and the funds never existed.
The claims against Marshbanks include $3.73 million from Lincoln Federal Savings and Loan, $2.46 million from Home Federal Savings of Grand Island, $5.4 million from Western National Bank of Cairo and $1.83 million from Western Nebraska Bank of Curtis.
A lawsuit filed by Charter West Bank alleges that Marshbanks enterprise was created for the purpose of defrauding banks. The lawsuit also implicated his financial adviser, Jesse Hill of Hickman and Heavy Ventures Inc., a corporate entity created by Marshbanks. The FBI and the Nebraskan Department of Banking and Finance have been involved in investigating whether charges will be filed against associates of Marshbanks.
Around $9.7 million in assets have been obtained from the estate to partially pay off the claims. Marshbanks mostly invested in residential properties through renovations and renting. These properties have been used as collateral to pay off some of the claims against Marshbanks.
The current legal case is over who will receive the $3.6 million in life insurance proceeds, Marshbank’s family or the financial institutions with outstanding claims. Marshbanks' beneficiaries include his wife and four children.
By Aubrey Benton