LINCOLN — Who deserves $3.6 million in life insurance coverage proceeds: the household of a Lincoln businessman implicated in a multimillion-dollar fraudulent mortgage scheme, or the monetary establishments ripped off by Aaron Marshbanks?
That query was argued Friday in courtroom as the trouble continues to resolve greater than $34 million in claims towards the Marshbanks property made by banks, financial savings and loans and credit score unions that loaned him cash.
The collateral claimed by Marshbanks and his monetary adviser in acquiring the loans was fictitious, and authorized claims poured in to recuperate unpaid loans after Marshbanks was discovered useless inside his automotive in a downtown Lincoln parking storage in November 2022.
The official reason for loss of life was a drug overdose, although Lincoln police mentioned {that a} suspected suicide word was discovered.
Property settlement transferring slowly
Since then, the FBI and the Nebraska Division of Banking and Finance have investigated whether or not prices needs to be filed towards any associates of Marshbanks, and the settlement of his property has been slowly transferring by way of the Lancaster County Courtroom.
About $9.7 million in belongings have been discovered up to now to partially repay the $34 million in authorized claims nonetheless excellent towards the property.
On Friday, arguments have been submitted over who deserves to learn from six life insurance coverage insurance policies, value a complete of $3.6 million, that Marshbanks took out within the years earlier than he died.
In 2021, based on courtroom data, Marshbanks named a household belief because the beneficiary of the insurance policies.
Belief says collectors are paid first
Amy Jorgensen, an Omaha lawyer representing a particular administrator appointed to spherical up belongings and repay collectors, mentioned the belief clearly states that the trustee shall “pay the allowed claims” of the property — the banks — previous to paying the beneficiaries, who on this case are Marshbanks’ spouse and his 4 youngsters.
Nevertheless, the lawyer representing Jennifer Marshbanks, the widow, argued Friday that the belief was set as much as profit the household and that state regulation makes life insurance coverage proceeds “exempt” from paying off collectors except there was an specific waiver of that exemption.
It’s “discretionary” and never “obligatory” that the insurance coverage proceeds can be utilized to pay collectors, mentioned legal professional William Lindsay of Omaha.
As a result of there was no “written task” permitting the usage of the life insurance coverage proceeds to pay collectors, the proceeds ought to go the household, he mentioned, “the first beneficiaries of the belief.”
Lancaster County Decide Holly Parsley took the case beneath advisement. It was unclear when she would possibly rule.
Dozens of loans, dozens of LLCs
Investigators have mentioned Marshbanks took out dozens of loans of as much as $2 million and extra from monetary establishments in Nebraska, Iowa, Wyoming and Louisiana.
He invested in residential properties, primarily, renovating them after which renting them, beneath dozens of restricted legal responsibility firms he shaped with names like 1 Chronicles 29:11 LLC which refers to a Bible verse, and Heavy Ventures LLC, which was arrange by a Wyoming lawyer who makes a speciality of cryptocurrency.
Tens of millions of {dollars} in claims towards the property have been settled in instances the place properties have been put up as collateral.
A multimillion-dollar luxurious house and “barndominium” complicated Marshbanks was constructing east of Lincoln was bought again by the financial institution that loaned him the cash for it. It was bought, at a loss, to buyers.
