The U.S. Department of Justice has released a statement about an investigation conducted by OIG agents:
"WICHITA, KAN. – A Kansas man was sentenced to 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."
Cory Nootnagel, assistant special agent in charge, OIG, added, "As chief executive officer of Heartland Bank, Shan Hanes had an obligation to operate the bank with sound judgment, integrity, and honesty. Instead, he abused his position to embezzle millions of dollars to cover his personal losses, which undermined the safety and soundness of the bank and led to its collapse.
"Sadly, his actions caused devastating financial harm throughout the Elkhart community and shattered its trust in banking institutions. We hope that today's sentencing will bring some closure to this community.
"Our office remains committed to bringing to justice bank executives who undermine the safety and soundness of community banks. We are proud to have worked with our federal law enforcement partners to achieve this result, and we thank the U.S. Attorney's Office for prosecuting this case and holding Mr. Hanes accountable for his crimes."
