Coinspeaker Former Bank CEO Gets 24 Years in Prison for $47M Crypto Fraud
According to the announcement on August 19, the 53-year-old man named Shan Hanes used his position as the CEO of Heartland Tri-State Bank (HTSB) in Elkhart, Kansas to embezzle the funds which eventually led to the bank failing at complete loss of equity for investors.
Court documents showed that during his tenure as the CEO of the bank, Hanes engaged in a fraudulent scheme known as “pig butchering.” This involved embezzling funds through a series of wire transfers from Heartland’s accounts to unidentified crypto wallets under his control.
Between May and July 2023, he had already initiated 11 wire transfers, siphoning off a total of $47 million from the bank.
He made sure the scheme was carried out during the time HTSB was insured by the Federal Deposit Insurance Corporation (FDIC). As a result, the $47 million he stole was absolved by the bank regulator.
While the bank regulator covered the stolen funds, investors were left with losses of approximately $9 million.
The case was heard yesterday, August 19 in a federal court at Kansas where Hanes pleaded guilty to one count of embezzlement by a bank officer. During the hearing, the judge condemned his actions and decided he deserved to spend the rest of his adulthood in a federal prison where he would have enough time to reflect on his actions.
A Breach of Trust
U.S. Attorney Kate E. Brubacher condemned Hanes’ actions, saying he had violated the ethics of his profession by prioritizing personal enrichment over protecting the bank’s investors and the institution itself.
“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,” she said.
Jon Ellwanger, Special Agent in Charge of the Western Region Office of Inspector General for the Board of Governors of the Federal Reserve System and Consumer Financial Protection Bureau, echoed these sentiments. He further stated that Hanes’ sentencing sends a clear message to all banking executives who may want to follow his footsteps.
“Today’s sentencing makes clear that bank executives who undermine the safety and soundness of community banks will be brought to justice,” he said.
Meanwhile, the court has scheduled a future hearing, which will take place within the next 90 days, to determine how much the convict, Hanes, will have to pay back to the victims of his crime.
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Former Bank CEO Gets 24 Years in Prison for $47M Crypto Fraud
