Lincoln tech consultant Brandon Dallmann, at left, is being sued to surrender cryptocurrency “keys” given to him by Aaron Marshbanks, prior to his death. Here, he confers with his attorneys after a court hearing in Lincoln last year concerning the estate of Marshbanks, who is implicated in the largest bank fraud in state history. (Paul Hammel/Nebraska Examiner)
LINCOLN – A lawsuit appears headed for dismissal against a key associate of Lincoln businessman Aaron Marshbanks, whom officials blame for perhaps the largest case of bank fraud in state history.
The associate, Brandon Dallmann, handled cryptocurrency investments and the associated passwords for Marshbanks, who died of a drug overdose in November 2022 as a massive bank fraud case against him was becoming known.
A month later, it was revealed that Marshbanks, a former star athlete at Lincoln Christian High School who bought and renovated residential properties, had obtained around $45 million in loans fraudulently from 19 financial institutions in Nebraska, Iowa and other states.
An unfinished “barndominium’ (at right) and a backyard pond are part of the complex that was being built by Aaron Marshbanks. (Paul Hammel/Nebraska Examiner)
As part of the effort to recover assets from the Marshbanks estate to pay off debts incurred by banks and credit unions, the lawyer handling the estate sued Dallmann, seeking information about the extent of Marshbanks’ crypto investments and the “keys” needed to discern whether assets remained.
On Thursday, a hearing to discuss the status of the lawsuit was held before Lancaster County District Court Judge Lori Maret. The judge granted a continuance in the case until Dec. 3, but the Examiner learned that the lawsuit will likely be dismissed because of Dallmann’s cooperation in helping track down the crypto investments.
According to the lawsuit, shortly before Marshbanks overdosed, the businessman emailed Dallmann with instructions to keep his crypto investments “rolling” to benefit his wife in the event of his death. He also provided the crypto keys to access them, the lawsuit said, and an “investments summary.”
Marshbanks used the proceeds from the ill-gotten bank loans, officials have said, to launch a “highly aggressive options trading strategy” in 2022 through his financial advisor, Jesse Hill. Some of the money was used to make payments on the earliest bank loans and to begin construction on a multi-million home and barndominium east of Lincoln.
The investments tanked in 2022, however, losing 90% of their value, officials have indicated, and the scheme began to unravel.
The scandal sent shockwaves through the state’s banking community over how a supposedly legitimate businessman, who had served on the Lincoln Christian School Board and was known for charity work, could fool so many financial institutions into loaning him money. Assets still being recovered from the Marshbanks estate are expected to repay only cents on the dollar to cover debts, according to lawyers involved in the case.
Hill falsely attested to bankers that Marshbanks had plenty of funds in investment accounts as collateral for the loans, which totaled $2 million each or more, according to federal court records.
Hill is scheduled to be sentenced in U.S. District Court on Oct. 30. He faces up to 30 years in prison and up to a $1 million fine. He has agreed to forfeit his share of ownership of a condominium in Puerto Rico and an airplane, both of which were purchased by Marshbanks.
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