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Bank purchases half-finished luxury home/acreage of deceased businessman who defrauded banks
LINCOLN — The partially finished, multimillion-dollar dwelling being built by Lincoln businessman Aaron Marshbanks was sold Friday, the latest effort to recover any assets remaining from what’s been described one of the largest bank frauds in state history.
City Bank & Trust of Lincoln, which had loaned Marshbanks $2.5 million to build the 4,800-square-foot home and barndominium/guest cottage on an acreage near Walton, purchased the property for $1.8 million.
Only bid at foreclosure auction
It was the only bid made during the foreclosure auction held in a quiet hallway of the Lancaster County Courthouse in Lincoln.
It’s the same building where legal proceedings continue in the effort to discover whether any assets remain to repay the $50 million in loans Marshbanks obtained before his suspicious death in November. Nearly two dozen financial institutions in Nebraska, Iowa, Wyoming and Louisiana have filed claims, along with contractors hired to furnish and landscape the home and acreage.
Paul Schelstraete, president of City Bank & Trust, said the next step will be reaching out to parties who have expressed interest in buying the property in hopes of recovering some of the funds lost in the transaction.
“We’re going to sell it,” Schelstraete said Friday. “We’ll contact people who are interested and go from there.”
Only a couple of onlookers, who said they knew Marshbanks, stood by as the lone bid was submitted Friday.
‘Going once … going twice …’
“Going once … going twice … going three times. It’s sold,” said Jim Haszard, a Lincoln attorney hired by City Bank & Trust to conduct the foreclosure auction.
The acreage includes a 1½-story home, which features a five-car garage, as well as a 6,666-square-foot “barndominium” that includes an indoor basketball court, a golf simulator, a wet bar and guest rooms. Estimates of its worth, when completed, have ranged from $3.5 million to $6 million.
A recent visit by the Examiner to the Marshbanks property found a new gate blocking access to the home — said to be devoid of finished walls and flooring. The home’s windows were boarded up, and sheeting covering the unfinished siding of the barndominium flapped in a spring wind.
‘Suspicious or unexplained’ bank transfers
The sale comes as recent court filings focus on a series of “suspicious or unexplained” bank account transfers involving the construction company hired to build the complex.
A week ago, Ed Hotz, the attorney hired to sort out what’s left of Marshbanks’ estate, joined with Liberty First Credit Union in asking a court judge to provide to the estate nearly $3 million in funds transferred by Marshbanks in the months before he was found dead in his car in a downtown Lincoln parking garage.
The request said there were “multiple suspicious or unexplained account transactions” by Marshbanks from a Liberty First account associated with Altar Enterprises, a construction company hired to build the Walton acreage, in the months before his death.
Marshbanks, court records indicated, owned 50% of Altar until he transferred his interest to Altar “for no consideration” about six weeks before his Nov. 2 death.
Transfer on day of his death
Among the transfers listed as suspicious was a $400,000 deposit from Marshbanks to the Altar account on the day Marshbanks was found dead.
Tim Svoboda, Altar’s owner, did not respond Friday to a request for comment. Hotz could also not be reached Friday.
Recently, neighbors to the Marshbanks acreage, at 11700 Van Dorn Street near the village of Walton, expressed concerns about erosion from huge berms of dirt erected on the property. They also worried about the possible negative impact on local groundwater levels from water wells dug to fill and sustain a huge backyard pond.
Six neighboring landowners sent a letter to Schelstraete on May 23 expressing concerns that “potential buyers” may not be aware of potential “legal concerns” associated with the property.
The letter said the concerns include a lack of silt fencing around bare, earthen berms up to 30 feet high surrounding the pond, and mining of groundwater for a “recreational/aesthetic” pond that might impact nearby residential wells used for drinking water.
Schelstraete, when asked about the neighbors’ concerns, said they should address them to the Lower Platte South Natural Resources District, which regulates wells and groundwater.
Three wells drilled
Three wells on the Marshbanks property were drilled but have not been used, he said. The large, rock-lined pond remains unfilled.
An official with the NRD said the agency does not regulate low-volume residential wells but does discourage the use of precious groundwater for such aesthetic purposes.
The nearby City of Lincoln just imposed restrictions on watering of lawns due to extreme drought in the area.
One neighbor, Mark Bertsche, said Marshbanks had always been friendly and cooperative when discussing their shared boundary. Marshbanks paid to have several trees planted along the property line, he said, and buried electrical lines to light up the foliage at night.
Bertsche recently had the property line surveyed and marked so a new owner would know where it is amid the planted trees.
“We all feel so sorry for his wife,” he said.
