Former Heartland Tri-State Bank (HTSB) CEO, Shan Hanes, reportedly transferred $47.1 million from the bank’s coffers into a cryptocurrency scheme. The CEO’s action had a domino effect which caused the bank to fail. Although FDIC covered the losses, the bank executive now faces a jail time of 24 years.
The former chief pleaded guilty to one count of embezzlement as investment frauds have gained steam. A recent FBI report noted that crypto scam losses surged 38% in 2023.
Former HTSB CEO siphons millions through crypto
The release by the Department of Justice notes that Shan started embezzling money from the bank between May and July 2023. The fraud carried 11 wire transfers that moved a total of $47.1 million from the bank to a crypto wallet.
The former CEO carried a “pig butchering” scam by running a cryptocurrency scheme that led to the bank’s ultimate failure. The fraud translated into a complete loss of equity for the bank’s investors before the FDIC stepped in. The Federal Deposit Insurance Corporation (FDIC) covered the $47.1 million loss but investors effectively lost $9 million.
US FDIC officials noted that Hanes abused his position of trust and that his actions undermine confidence in financial institutions.
Hanes faces 293 months in prison
Hanes pleaded guilty to embezzlement by a bank officer and has been sentenced to 293 months (about 24 years) in prison. A separate hearing in the next 90 days will determine the monetary penalty.
Special Agent in Charge, Stephen Cyrus of the FBI Kansas City Field Office, said, “His idea to get rich quick, in all reality, was a pig butchering scheme.” He added that Hanes’ job was to protect the bank’s customers and identify fraudulent scams rather than participate in them.
Pig butchering crypto schemes have made a comeback in the FBI’s Internet Crime Report for 2023. A report revealed that investment scam losses have grown by 38% with around $4 billion lost in crypto frauds.
Source: https://www.cryptopolitan.com/ex-htsb-ceo-sentenced-to-24-years-for-fraud/