Construction Liens Join $44 Million In Financial Claims In Nebraska Bank Fraud Case

From Nebraska Examiner:

By Paul Hammel

December 14, 2022

LINCOLN — Two companies have filed nearly $1 million in construction liens against a luxury acreage being developed by a Lincoln businessman under investigation for bank fraud.

Lincoln-based Altar Construction and Omaha’s Millard Lumber filed claims of $650,000 and $322,707, respectively, against an east Lincoln acreage being developed by Aaron Marshbanks, who was found dead a month ago in a downtown Lincoln parking garage.

The Nebraska Department of Banking and Finance has said it is investigating what has been described as a “pretty sophisticated” loan scam involving Marshbanks and more than 20 banks, savings and loans and credit unions in Nebraska and Iowa.

Many loans unsecured

Claims of at least $44 million have been filed against Marshbanks’ estate so far. Some of the loans listed homes as collateral, but many of the loans were personally guaranteed or listed, as collateral, investment accounts that the banks now claim did not exist.

On Monday, FBI agents searched the rural Hickman home of a financial adviser, Jesse Hill, who handled the investment accounts and helped obtain the loans.

Hill has not returned messages seeking comment, and an attorney representing Marshbanks estate has declined to comment.

State banking officials have said they don’t expect that the financial institutions will face severe financial hardships due to the loan fiasco. Banks carry insurance against losses created by employees, but not those caused by bad loans.

According to Lancaster County Register of Deeds documents, the two construction liens were filed Dec. 5, three days after the Nebraska Examiner first reported about the case, which some have said could become the state’s largest involving bank fraud.

$322,707 worth of cabinets

Millard Lumber is seeking repayment for $322,707 worth of “cabinets,” according to the construction lien it filed. Altar Construction said it is owed $650,000 for construction work and completing the building of the property.

A construction lien is a legal means to obtain payment for unpaid construction debts. They were filed against the Blossom Trust, to which Marshbanks and his wife transferred ownership shortly after purchasing the acreage in 2020.

The multimillion-dollar complex was seen as a significant step up for Marshbanks and his family, which has been residing at a south Lincoln home valued at $230,000 for property tax purposes.

That, neighbors said, raised questions about where he was getting the money to develop a luxury home that included a barndominium, complete with an indoor basketball court, a guest cottage, swimming pool and pond.

Court hearing set for Jan. 11

On Friday, one of the banks that claims it was a victim of fraud asked for an emergency hearing to determine what, if any, assets remain in Marshbanks’ estate to pay off the loans. Loan documents said the money was used for business expenses and for buying and rehabilitating homes.

Lancaster County Judge Holly Parsley has since scheduled that hearing for Jan. 11.

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