Shan Hanes, the former CEO of Heartland Tri-State Bank, has admitted to embezzling $47.1 million through crypto. This fraud led to the bank’s collapse, leaving many stranded and unable to recover their savings and retirement funds.
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Hanes is set to be sentenced on August 8 and could face up to 30 years in prison. The collapse of Heartland Tri-State Bank affected not just the direct victims but also the local economy. Banks play a critical role in regional development, and their failure often leads to a domino effect.
Hanes Pleads Guilty To Fraud
Court documents reveal that Hanes pleaded guilty to one count of embezzlement by a bank officer. His actions caused the bank’s investors to lose all equity. The stolen funds were supposed to be safeguarded but instead, funnelled into a cryptocurrency wallet.
According to the DOJ’s press release, Hanes, 52, from Elkhart, Kansas, knowingly used his position to steal millions. Between May 2023 and July 2023, he transferred the bank’s funds through 10 wire transfers to cryptocurrency accounts controlled by unidentified third parties. Heartland Tri-State Bank was insured by the Federal Deposit Insurance Corporation (FDIC) during this time, further exacerbating his crime.
Victims Can’t Recover Their Losses
U.S. Attorney Kate E. Brubacher did not hold back on her words. In the press conference, she stated:
Shan Hanes is a liar and a master manipulator who caused Heartland Tri-State Bank to collapse. Even as he was squandering away tens of millions of dollars in cryptocurrency, Hanes orchestrated schemes to cover his tracks concerning the losses at the bank.
The victims, many of whom lost their life savings and retirement funds, will likely never fully recover their losses, according to reports. Jon Ellwanger, Special Agent in Charge, Western Region, Office of Inspector General for the Board of Governors of the Federal Reserve System and Consumer Financial Protection Bureau, added, “Shan Hanes exploited his position as a bank executive to commit fraud and embezzle funds that ultimately led to Tri-State Bank’s failure.”
Hanes To Get 30 Years Jail Term
Hanes’ sentencing on August 8 could lead to a maximum of 30 years in prison. The federal district court judge will consider the U.S. Sentencing Guidelines and other statutory factors before determining his sentence.
The investigation involved several federal agencies. The Federal Bureau of Investigation (FBI), Federal Deposit Insurance Corporation – Office of Inspector General (FDIC-OIG), Federal Reserve Board – Office of Inspector General (FRB-OIG), and Federal Housing Finance Agency – Office of Inspector General (FHFA-OIG) all have a hand in bringing Hanes to justice.
Ellwanger said, “Today’s announcement demonstrates our commitment to bringing to justice bank executives who engage in illegal activities that undermine the public trust. I commend our agent and law enforcement partners for their diligent work that ultimately led to this outcome.”
Cryptopolitan reporting by Jai Hamid
