Judge approves injunction against financial adviser involved in Nebraska bank fraud case
Order gives Jesse Hill access to assets for cost of living and legal expenses but freezes other accounts
On Dec. 12, 2022, the FBI searched this rural Hickman acreage owned by financial advisor Jesse Hill, as part of a probe into the largest bank fraud case in state history. (Paul Hammel/Nebraska Examiner)
LINCOLN — A judge approved an injunction Tuesday that freezes most assets of a financial adviser involved in one of the largest cases of bank fraud in state history.
However, Jesse Hill of Hickman and his wife, under the order, will be able to access two personal banking accounts, and were given permission to obtain a home equity loan to help paying legal and living expenses.
Lancaster County District Judge Ryan Post issued the temporary injunction on Tuesday, approving an out-of-court agreement reached between state banking officials and Hill’s attorney, Joshua Dickinson of Omaha.
Follows restraining order
The ruling followed a restraining order issued on behalf of the Nebraska Department of Banking and Finance on Dec. 28 that blocked Hill from disposing of assets or destroying financial documents. The department alleged several violations of state securities laws, including that Hill converted investments for personal use and lied to investors.
Hill was a partner with Lincoln businessman Aaron Marshbank, who was found dead of a suspected suicide on Nov. 2.
The pair, according to state banking officials, made false claims and used fabricated financial statements to obtain $20 million in loans from 14 banks from March 2021 through September 2022.
Financial institutions in Nebraska and Iowa and Louisiana are seeking repayment of more than $40 million in loans issued to Marshbanks for purchasing and rehabilitating rental properties.
Hill claimed Marshbanks had funds
Hill, banking officials alleged, signed at least 22 agreements with banks, savings and loans and credit unions falsely attesting that Marshbanks had millions of dollars in investment accounts kept by Hill’s First SOJO Capital Group, as collateral. No such accounts existed, the state alleges.
State officials maintain that Hill began “a highly aggressive options trading strategy” in early 2022, which ultimately rendered his investment firm insolvent.
Hill did not return a request for comment Tuesday.His attorney declined to comment.
The institutions that loaned money to Marshbanks, as well as contractors and building materials suppliers, have filed court demands seeking repayment of the loans, as well as compensation for work done on investment property owned by Marshbanks and materials purchased for a multimillion-dollar home he was building in east Lincoln.
These requests are pending. A court hearing before Lancaster County Judge Holly Parsley is scheduled Wednesday in Lincoln to appoint an Omaha lawyer, Edward Hotz, as special administrator of the Marshbanks estate.
Banks should be OK, official says
Richard Baier, the head of the Nebraska Banking Association, said that financial institutions in the state are well capitalized and should weather any financial losses.
He added that the association continues to evaluate ways to prevent such fraudulent activities.
In other recent developments in the case:
Michael Kramer, a partner with Marshbanks in a limited liability company called MKAM, filed a request Monday seeking permission from the court to buy out Marshbanks’ half-interest in 21 properties in Omaha and Lincoln that the company planned to “flip.”
Kramer, in a court filing, said half of the equity in MKAM amounted to $117,750, which would be paid to Marshbanks’ estate to help settle debts, simplify the estate and avoid foreclosure.
Funds ‘filtered in and out,’ property neglected
The amount of equity was so low, according to court records, because Marshbanks “neglected some properties,” overborrowed on some properties and then took some proceeds from refinanced loan for personal use “… all the while without accounting or informing Mr. Kramer of the draining the equity of the LLC.”
In a letter to the court, the attorney for Kramer said that Marshbanks was “filtering” money in and out of MKAM without Kramer’s knowledge and had used a line of credit granted to the LLC for non-MKAM purposes.
A court hearing on the request is scheduled Jan. 25 before Judge Parsley.
On Friday, Pinnacle Bank filed three claims against the Marshbanks estate for four loans, with unpaid balances of more than $2 million.
Among the collateral pledged was rents from two homes in Omaha and from a 4,000-square-foot, eight-bedroom home in Davenport, Florida.
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