LINCOLN — State banking officials and the Nebraska Attorney General’s Office moved Thursday to freeze the accounts of a financial adviser allegedly involved in one of the state’s largest cases of bank fraud.
A 20-page legal complaint, filed late Wednesday, alleges that Jesse Hill of Hickman, investment adviser for deceased Lincoln businessman Aaron Marshbanks, and his firm, First SOJO Capital, had committed multiple violations of the State Securities Act, including false claims of financial assets and fabrication of financial statements.
Lancaster County District Judge Ryan Post issued a temporary restraining order Wednesday barring Hill from destroying or altering any financial documents and freezing his assets. A court hearing on a more permanent injunction is scheduled for Jan. 5.
Chief among the complaints against Hill, according to court files, was that he provided false statements to financial institutions about the assets in Marshbanks’ investment accounts, allowing Marshbanks to obtain millions in loans and lines of credit with financial institutions.
Hill misrepresented accounts
In fact, court files indicate, Hill’s firm had net capital of $9,295.65 as of Dec. 14 — far short of the $6 million and $7 million he had told banks that Marshbanks had in investment accounts.
The Nebraska Examiner first reported Dec. 2 about the case, which one state banking official described as a “pretty sophisticated fraud” involving the use of several limited liability companies.
More than $45 million in legal claims for unpaid loans have been filed by more than 20 Nebraska and Iowa banks, savings and loans and credit unions against Marshbanks’ estate. Some of the loans provided rental homes in Omaha, Lincoln and Louisiana, in various stages of rehabilitation, as collateral. But many of the largest loans were unsecured and were granted on the basis of financial assets that, officials now allege, didn’t exist.
Many of the banks maintained that the loans were issued only after Hill attested that Marshbanks had more than sufficient collateral in investment accounts kept by Hill’s firm, First SOJO Capital, to cover the loans.
‘Sizable losses’
State officials maintain, however, that two pooled investment accounts managed by Hill had suffered “sizable trading losses” in January and February 2022. Despite that, Hill continued to misrepresent the value of the investments.
The legal complaint, filed by the Nebraska Attorney General’s Office, stated that between March 11, 2021, and September 23, 2022, Marshbanks and Hill made fraudulent statements to at least 14 banks, securing over $20 million in loans.
It also alleged that Marshbanks and Hill provided falsified financial statements, using the logo of a former account manager who quit amid the “catastrophic” investment losses. The statements falsely claimed that investment accounts used to obtain the loans contained millions of dollars, when, in fact, the accounts didn’t exist.
“Despite the absence of any existing Marshbanks accounts, Hill signed at least 22 control agreements representing to banks that the accounts were real, under his control, and could be given as collateral for a loan,” stated a press release issued Thursday by the State Department of Banking and Finance.
The court filing against Hill — who was sanctioned by the Banking Department in 2018 for selling unregistered securities — also alleged that he lied to other investors about the balances in their SOJO Capital investment accounts.
The Nebraska Attorney General’s Office declined to comment Thursday.
Kelly Lammers, the state banking director, also declined comment and referred a reporter to the press release.
The banking department and the FBI searched the rural Hickman acreage owned by Hill on Dec. 12.
An FBI spokeswoman said Wednesday that the investigation into the Marshbanks/Hill case was ongoing.
At least five lawsuits have been filed against Hill and companies that he oversaw, alleging that loans were obtained through fraud and misrepresentations.
Hill fined in 2018
In 2018, the State Banking Department fined Hill $7,500 and ordered him to repay investors after it was discovered he had sold more than $4 million in unregistered securities to 47 investors through a firm called JT Equity.
Marshbanks, according to recent court documents, was among the investors in JT Equity who got their money back. Marshbanks received a refund of $963,540 in March 2021.
A consent order signed by Hill after the 2018 sanction prohibited him from establishing any new pooled investment funds until 90 days after all refunds had been paid to investors in JT Equity.
Court filings on Wednesday said Hill had violated that agreement — “repeat(ing) the exact same conduct” — by establishing a new pooled fund using money from multiple investors, which he deposited into his personal account, using it to invest in securities.
Calls to Hill on Thursday went unanswered. Court files did not indicate whether he was represented by an attorney.
Marshbanks, a 45-year-old former star athlete at Lincoln Christian High School, was found dead in a downtown Lincoln parking garage in November. The cause of death has been undetermined awaiting toxicology reports.
SUPPORT NEWS YOU TRUST.
Read More..