A former CFO of a Nebraska bank has been convicted in federal court of bank fraud and attempted bank fraud, according to the Justice Department.
After a two-week trial in Omaha, a jury on March 6 found Aaron Luneke, 44, of Columbus, Nebraska, guilty of defrauding his employer, Bank of the Valley, to obtain $4.3 million in loans, and attempting to defraud a Minnesota lender, prosecutors in the U.S. Attorney’s Office for the Nebraska district said.
“Mr. Luneke exploited his position of power to conceal a pattern of deception that defrauded his employer. Financial crimes erode public trust and confidence in our country’s economy, so we will remain steadfast in our efforts to investigate those using illegal means to enrich themselves for personal gain,” Eugene Kowel, special agent in charge of the FBI’s Omaha field office, said in a March 12 news release.
Luneke was Bank of the Valley’s CFO from July 2018 through May 2022. Between February and June 2021, Luneke crafted a scheme to defraud the Bellwood, Nebraska-based bank and another lender, St. Cloud, Minnesota-based Stearns Bank, to fund a car wash construction project in Columbus, the DOJ said.
In an effort to dupe both banks into approving loans they otherwise wouldn’t have, Luneke “orchestrated a pattern of inflated invoices” and didn’t disclose financial obligations, prosecutors said.
Luneke submitted fraudulent and inflated contractor invoices to Bank of the Valley and obtained two loans from the bank totaling about $4.3 million, the DOJ said. The seven-branch bank has about $542.9 million in assets, as of the fourth quarter.
Luneke also attempted to defraud Stearns Bank, again using fake invoices to overstate the valuation of the car wash property to secure a $3.5 million refinancing loan, prosecutors said.
Bank of the Valley’s president, former chief credit officer and compliance employees testified during the trial, the DOJ said.
Further, Luneke didn’t disclose “significant personal debts” owed to family members tied to the Stearns Bank loan application, and “relied on a series of corporate shell entities” to hide that others benefited from his ownership interest in the car wash business, prosecutors said.
“This case highlights the risk that trusted bank insiders will abuse their position to perpetrate fraud, and in this instance obtain millions of dollars from financial institutions,” Justin Bundy, special agent in charge of the Federal Deposit Insurance Corp. Office of Inspector General’s Kansas City region, said in the news release. “The FDIC OIG stands firm in its commitment to working with our law enforcement partners to investigate and bring to justice individuals who seek to threaten the safety and soundness of our Nation’s financial institutions, especially those who exploit their positions to do so.”
Luneke faces up to 60 years of prison, as well as fines of up to $2 million, the DOJ said. Sentencing is scheduled for June 10.
Luneke’s LinkedIn profile indicates he’s been working as a fractional CFO and controller since June 2022.
At Bank of the Valley, Luneke was “recruited as part of the succession management plan to enhance the financial performance of the enterprise,” according to his LinkedIn profile. He “developed [a] funding matrix to support a fluctuating and high-growth balance sheet, curated a capital plan that maximized shareholder value, and ensured durable leverage for continued growth,” the profile reads.
Prior to his time at Bank of the Valley, Luneke spent four years as CFO and vice president of finance at Foundation One Bank in the Omaha area, according to his LinkedIn profile.
