Ex-U.S Bank CEO Sentenced to 24 Years in Prison Over $47m Crypto Fraud
The former CEO of failed Heartland Tri-State Bank was sentenced to over 24 years in prison for embezzling more than $47 million in a fraudulent crypto scheme that caused the bank’s collapse. He funneled the stolen funds into cryptocurrency wallets linked to a “pig butchering” scam, leading to a $9 million loss for investors and a $47.1 million loss covered by the Federal Deposit Insurance Corporation (FDIC).
The U.S. Department of Justice (DOJ) announced on Monday that Shan Hanes, former CEO of Heartland Tri-State Bank (HTSB), was sentenced to 24 years 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.”
Hanes’ actions caused Heartland Tri-State Bank to fail, leading to a $9 million loss for investors and a $47.1 million loss covered by the Federal Deposit Insurance Corporation (FDIC). Special Agent in Charge Justin R. Bundy commented:
“Shan Hanes was sentenced today for his role in a $47.1 million embezzlement scheme that ultimately caused Heartland Tri-State Bank to fail.”
The 53-year-old former bank executive pleaded guilty to embezzling $47.1 million from HTSB through 11 wire transfers between May and July 2023, directing the funds to cryptocurrency wallets involved in a scam known as “pig butchering.” This type of scheme typically involves fraudsters convincing victims to invest in fake cryptocurrency opportunities, only to steal the money. The funds were funneled into multiple cryptocurrency accounts controlled by unidentified third parties, making them difficult to trace.
Special Agent in Charge Stephen Cyrus of the FBI Kansas City Field Office described: “Mr. Hanes, as the CEO of Heartland Tri-State Bank, held the trust and confidence of the community of Elkhart, KS, but he violated that trust. He attempted to benefit financially by embezzling funds from the bank. His idea to get rich quick, in all reality, was a pig butchering scheme. His involvement in this scheme ultimately led to the bank’s collapse. His job, the bank’s job was to protect its customers and identify fraudulent scams – not to participate in them.”
U.S. Attorney Kate E. Brubacher emphasized that Hanes’ scheme not only betrayed the bank and its investors but also undermined trust in the financial system. She opined:
“Hanes’ greed knew no bounds … Not only did Shan Hanes betray Heartland Bank and its investors, but his illegal schemes also jeopardized confidence in financial institutions”
