Former Kansas Bank CEO sentenced to more than 24 years in prison for $47 million cryptocurrency fraud

A former Kansas financial institution govt has been sentenced to 293 months in jail for embezzling $47.1 million in a cryptocurrency fraud scheme that led to the collapse of Heartland Tri-State Financial institution (HTSB).

Former HTSB chief govt Shan Hanes, 53, pleaded responsible to at least one rely of corruption by a financial institution official.

$47M Cryptocurrency Fraud

courtroom paperwork disclose Hanes executed 11 unauthorized wire transfers between Could and July 2023, transferring $47.1 million in financial institution funds to cryptocurrency wallets as a part of a “pig-killing” scheme to lure unsuspecting of traders make fraudulent digital asset investments.

Particular Agent in Cost Justin R. Bundy broadcasts Hanes’ sentencing for allegedly embezzling $47.1 million scamin the end resulting in the collapse of Heartland Tri-State Financial institution.

The Federal Deposit Insurance coverage Company (FDIC), which insured HTSB on the time, absorbed the losses, and the financial institution’s traders suffered losses of $9 million because the establishment collapsed underneath the load of the fraud.

The FDIC confirmed that fraudulent transfers have been made to a number of cryptocurrency accounts managed by unidentified third events, leaving banks unable to get well the funds.

A federal decide has ordered a separate listening to inside the subsequent 90 days to find out compensation for the victims.

Officers blame former financial institution CEO for function in financial institution collapse

U.S. Legal professional Kate E. Brubacher accused Hanes of limitless greed, saying “he violated his skilled obligations, private relationships and federal regulation. Shan Hanes not solely betrayed Heartland Financial institution and its investments and his unlawful scheme undermined confidence in monetary establishments.

FBI Particular Agent in Cost Stephen Sellers struck an analogous tone, stressing that Hanes, who was trusted by the Elkhart group, used his place to counterpoint himself by means of a rip-off that led to the financial institution’s collapse. He added that Hanes’ accountability was to guard the financial institution and its prospects, to not have interaction in fraud.

Correy Brinkman, FHFA-OIG Central Area Particular Agent in Cost, mentioned Hanes’ actions have been a critical breach of belief, brought about important losses to the financial institution’s prospects and contributed to its downfall.

One other agent, Jon Ellwanger, added that the sentence sends a robust message that these executives who undermined the steadiness of group banks will face justice.

He was pleased with the cooperation with federal regulation enforcement that led to this end result and thanked the U.S. Legal professional’s Workplace for making certain Hanes was held accountable for his crimes.