The former CEO of a failed bank in Elkhart, Kansas will spend 24 years behind bars after funneling millions of savings into a cryptocurrency scheme.
The Justice Department says that between May and July last year, Shan Hanes, who was then CEO of Heartland Tri-State Bank (HTSB), sent a total of $47.1 million of the bank’s money to a cryptocurrency wallet that involved was at the pig slaughter.
The mode is a popular crypto scheme where scammers build relationships with their intended victims to lure them into fraudulent investments.
The 53-year-old initiated 11 outgoing bank transfers over the period, funding several cryptocurrency accounts controlled by unidentified third parties.
The DOJ says Hanes’ action ultimately caused the bank to fail and investors to lose $9 million, although the Federal Deposit Insurance Corporation (FDIC) picked up the $47.1 million loss.
Says U.S. Attorney Kate E. Brubacher:
“Hanes’ greed knew no bounds. He violated his professional obligations, his personal relationships, and federal law. Shan Hanes not only betrayed Heartland Bank and its investors, but his illegal schemes also jeopardized trust in financial institutions.”
The Consumer Financial Protection Bureau, which assessed the losses, said HTSB had about $139 million in assets before it filed for bankruptcy in 2023. The agency also raised the alarm about similar schemes that could put financial institutions at risk.
“We recommend that the Council raises awareness among banks about cryptocurrency scams and trains examiners on such scams and relevant preventive and detective checks at banks.”
Hanes was sentenced Monday after pleading guilty to one count of embezzlement from a bank official.
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