Friend, business partner of Marshbanks wonders where assets went in massive bank fraud case
Dallmann says he ‘traded’ his friend more than $2 million in cryptocurrency in exchange for investments but is unsure what was spent
Lincoln tech consultant Brandon Dallmann, at left, confers with his attorneys after a court hearing last month concerning the estate of a deceased friend and business partner implicated in the largest bank fraud in state history. (Paul Hammel/Nebraska Examiner)
LINCOLN — In a nearly empty courtroom, Brandon Dallmann described Tuesday how he provided more than $2 million in cryptocurrency to a longtime friend and business partner for investment in other areas.
“I wanted to get into real estate, other opportunities outside of the blockchain world that I’m in,” Dallmann said.
But like dozens of Nebraska financial institutions and contractors, Dallmann said he is now left wondering where the money went after that buddy, Aaron Marshbanks, was found dead in his car, parked in a downtown Lincoln parking garage in November.
‘I do not know’
“I do not (know),” he responded, after his attorney asked if all of his $2 million had been invested.
Tuesday was the first time digital or cryptocurrency has been mentioned publicly in the case of Marshbanks, a Lincoln businessman and former star athlete at Lincoln Christian High School who has been implicated in perhaps the largest case of bank fraud in state history.
Claims against his estate of more than $50 million have been filed by more than 30 banks, credit unions, savings and loans and business partners over loans and unpaid bills.
Financial institutions have maintained that Marshbanks presented fraudulent financial statements to obtain loans of up to $2 million, fooling them into thinking he had plenty of collateral and was running a legitimate business.
Mr. Marshbanks left a lot of people in this world without information about where his assets went.
– attorney Nicole Jilek
The FBI and the Nebraska Department of Banking and Insurance are continuing to investigate. Meanwhile, a court-appointed lawyer is working to sort out whether the estate contains any remaining assets for the massive number and amount of claims.
Missed deadline to file claim
In court Tuesday, Dallmann, who described himself as a consultant to tech companies, asked a county judge to allow him to file a late claim against the Marshbanks estate.
Jan. 24 was the deadline for filing claims against the estate. Dallmann told Lancaster County Judge Holly Parsley that he didn’t meet that deadline because he had been told the estate was likely insolvent and it would be a waste of time to file a legal claim.
“I didn’t feel that it would be worth filing,” he testified.
Dallmann was engaged in six or seven limited liability companies formed by Marshbanks. It was part of what was described as an “intricate web” of LLCs formed by Marshbanks in purchasing and rehabilitating dozens of rental properties in Omaha, Lincoln, Council Bluffs, Wyoming and Louisiana.
Set up meeting over ‘misdealings’
Dallmann, who was described in court as a close friend of Marshbanks, also served as an “intermediary” between Marshbanks’ widow and Brandon Hamm of Omaha, the attorney initially hired to sort out the estate.
Hamm said Dallmann even helped set up a meeting, after Marshbanks was found dead Nov. 2 of a drug overdose, with 15 to 20 victims of the businessman’s “misdealings.”
The Omaha lawyer said he eventually learned that Dallmann was more than a buddy and was also a business partner of Marshbanks, from another friend/business associate of Marshbanks, Kearney attorney Nick Norton.
Hamm said he talked with Dallmann multiple times on the phone and encouraged him several times to retain a lawyer to discern whether to file a claim against the estate.
“I don’t believe I was ever aware of the magnitude of the transfers of digital assets that he mentioned today, being more than $2 million,” Hamm said.
Dallmann said he was more of a silent partner in his business dealings with Marshbanks, who provided little information on how his digital assets were being invested.
Crypto plunged in value
After Marshbanks’ death, Dallmann said, he could not access Google documents “in the cloud” that had provided some detail about the holdings in the LLCs he shared an interest in — LLCs that included Nebraska Christmas Lights LLC, Kingdom Air LLC and Solomon III LLC.
He said he was not aware if any digital assets remained.
Dallmann, described online as a co-founder of a “digital asset exchange” called Unizen, said he had provided digital money to Marshbanks from spring 2021 into 2022. (In 2022, cryptocurrency plunged in value, losing about two-thirds of its value.)
Hamm said that in his conversations with Dallmann, he never told him not to file a claim against the estate but did relate that a huge number of claims had been made and mentioned “the inability to find (out) where all of that money had gone.”
“The claims … appeared to far, far exceed the assets we were able to find,” the attorney said.
That was despite the labors of three lawyers working full-time to determine known creditors, Hamm said. “It was triage.”
‘A deluge of information’
“It was a deluge of information,” he added, as more and more financial institutions were filing claims. “It’s fair to say that this is an unusual case.”
Dallmann said he contacted one lawyer recommended by Hamm but kept getting referred to other attorneys because so many law firms had conflicts of interest, since they were already representing other banks and business associates to whom Marshbanks owed money.
Under questioning by Ed Hotz, the lawyer now sorting out the estate, Dallmann admitted that he was aware of the Jan. 24 deadline to file claims against the estate. Hotz opposed allowing Dallmann to file a late claim.
But Dallmann’s attorney, Nicole Jilek, argued that an exception should be made for Dallmann, given the difficulty in discovering whether any assets remained.
Jilek also suggested that fraud may have been a factor in missing the deadline, because her client was unable to access Google documents that detailed his business dealings with Marshbanks.
“Mr. Marshbanks left a lot of people in this world without information about where his assets went,” Jilek said.
“Mr. Dallmann invested $2 million and does not know what portion of that was invested in entities or what portion that may remain in a blockchain investment,” she added.
After the 105-minute-long hearing, Judge Parsley took the matter under advisement.
Dallmann and his attorneys left without commenting to a reporter. Norton, an associate of Marshbanks, has not returned multiple phone calls left by the Examiner.
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