The former chief executive officer of a southwest Kansas bank has been sentenced to almost 24 and a half years in prison for a cryptocurrency scheme that caused the bank to fail.
A sentencing hearing was held Monday in federal court for 53-year-old Shan Hanes of Elkhart. He had pleaded guilty to one count of embezzlement by a bank officer.
The U.S. Attorney’s Office for Kansas said while serving as 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 a separate hearing to finalize restitution in the case.
U.S. Attorney for Kansas Kate Brubacher said in a press release, “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.”
