Ex-CEO of collapsed bank sentenced to over 24 years in prison for embezzling $47,100,000 in crypto scam: DOJ

The former CEO of a bankrupt bank in Elkhart, Kansas, faces 24 years behind bars after funneling millions of depositors' funds into a cryptocurrency scheme.

The Justice Department stated that between May and July of last year, Shan Hanes, then CEO of Heartland Tri-State Bank (HTSB), transferred a total of $47.1 million from the bank's funds to a cryptocurrency wallet involved in the pig slaughter.

This mode is a popular crypto scheme where scammers build relationships with their chosen victims to lure them into fraudulent investments.

During this period, the 53-year-old initiated eleven outgoing electronic transfers, funding several cryptocurrency accounts controlled by unidentified third parties.

According to the U.S. Department of Justice, Hanes' actions ultimately led to the bank's bankruptcy and a loss of $9 million for investors, even though the Federal Deposit Insurance Corporation (FDIC) covered the $47.1 million loss.

US Attorney Kate E. Brubacher says:

“Hanes' greed knew no bounds. He violated his professional duties, his personal relationships and federal law. Shan Hanes not only defrauded Heartland Bank and its investors, but also jeopardized trust in financial institutions with his illegal activities.”

The Consumer Financial Protection Bureau, which reviewed the losses, says the HTSB had assets worth about $139 million before it went bankrupt in 2023. The agency also raised alarms about similar schemes that could put financial institutions at risk.

“We recommend that the Board raise awareness among banks about cryptocurrency fraud and train auditors on such fraud and related prevention and detection controls at banks.”

Hanes was sentenced on Monday after pleading guilty to one count of embezzlement by a bank employee.

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