Former CEO of failed Kansas bank sentenced to prison

A Kansas man was sentenced to 24 years, (293 months), in prison for using his former position as chief executive officer (CEO) of a bank to embezzle tens of millions of dollars in a cryptocurrency scheme which led the bank to fail at a complete loss of equity for investors.

According to court documents, Shan Hanes, 53, of Elkhart pleaded guilty to one count of embezzlement by a bank officer.

While the CEO of Heartland Tri-State Bank (HTSB) in Elkhart, Kansas, Hanes initiated 11 outgoing wire transfers between May 2023 and July 2023 totaling $47.1 million of Heartland’s funds to a cryptocurrency wallet in a cryptocurrency scheme referred to as “pig butchering.” The funds were transferred to multiple cryptocurrency accounts controlled by unidentified third parties during the time HTSB was insured by the Federal Deposit Insurance Corporation (FDIC).

The FDIC absorbed the $47.1 million loss. Hanes’ fraudulent actions caused HTSB to fail and the bank investors to lose $9 million. A federal judge ordered that restitution be finalized at a separate hearing within the next 90 days. “Hanes’ greed knew no bounds. He trespassed his professional obligations, his personal relationships, and federal law. Not only did Shan Hanes betray Heartland Bank and its investors, but his illegal schemes also jeopardized confidence in financial institutions,” said U.S. Attorney Kate Brubacher.