Ex-Bank CEO Sentenced to 24 Years for $47M Crypto Fraud, Causing Bank Collapse

Former Chief Executive Officer of Heartland Tri-State Bank in Kansas, Shan Hanes, has been sentenced to 24 years and 5 months in federal prison for his role in a $47 million cryptocurrency fraud that led to the bank’s collapse.

Hanes, who served as the CEO of the now-defunct bank, was found guilty of embezzling millions through a fraudulent scheme that spanned several months in 2023. The court revealed that between May and July of this year, Hanes orchestrated a “pig butchering” scheme, executing over a dozen wire transfers from the bank to a crypto wallet, ultimately causing severe financial damage.

In an August 19 press release, U.S. Attorney Kate E. Brubacher condemned Hanes’ actions, stating, “Hanes’ greed knew no bounds. He betrayed the trust of his bank, its investors, and the community. His illegal schemes not only led to the collapse of Heartland Tri-State Bank but also undermined confidence in financial institutions.”

Brubacher emphasized that the sentence reflects a commitment to holding those in positions of trust accountable when they violate the law for personal gain.

Stephen Cyrus, Special Agent in Charge of the FBI Kansas City Field Office, also commented on the case, highlighting the significant breach of trust committed by Hanes. “As the CEO, Hanes was entrusted with safeguarding the bank’s assets and its customers’ interests. Instead, he chose to engage in a get-rich-quick scheme that led to the bank’s downfall,” Cyrus stated.

The Federal Deposit Insurance Corporation (FDIC) covered the $47.1 million loss incurred from Hanes’ fraudulent activities, ensuring that customers did not suffer the financial consequences. However, the collapse of the bank also resulted in an additional $9 million loss to its investors.