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Fmr. Executive Pleads Guilty After Losing Bank’s $47.1 Million in Crypto Scheme

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By the United States Attorney’s Office – District of Kansas

 

WICHITA, Kan. – A Kansas man pleaded guilty today to using his position as a bank executive to embezzle millions of dollars causing the bank to fail at a complete loss of equity for investors.

According to court documents, Shan Hanes, 52, of Elkhart pleaded guilty to one count of embezzlement by a bank officer.

Hanes previously served as chief executive officer (CEO) of Heartland Tri-State Bank (HTSB) in Elkhart, Kansas. From May 2023 to July 2023 Hanes initiated a series of 10 outgoing wire transfers totaling $47.1 million of Heartland’s funds to a cryptocurrency wallet. 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. 

“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,” said U.S. Attorney Kate E. Brubacher. “Many victims will never fully recoup losses to their life savings and retirement funds, but at least we at the Department of Justice can see that Hanes is held criminally responsible for his actions.”

“Shan Hanes exploited his position as a bank executive to commit fraud and embezzle funds that ultimately led to Tri-State Bank’s failure,” said 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. “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.”

Hanes is scheduled to be sentenced on August 8, 2024, and faces a maximum of 30 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

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) are investigating the case.

Assistant U.S. Attorney Aaron Smith is prosecuting the case.