The previous CEO of a failed financial institution in Elkhart, Kansas will spend 24 years behind bars after funneling thousands and thousands of depositors’ cash right into a cryptocurrency scheme.
The Justice Division says that between Might and July final 12 months, Shan Hanes, who was then serving as CEO of Heartland Tri-State Financial institution (HTSB), despatched a complete of $47.1 million of the financial institution’s funds to a cryptocurrency pockets concerned in pig butchering.
The modus is a well-liked crypto scheme the place scammers construct relationships with their focused victims to lure them into making fraudulent investments.
The 53-year-old initiated 11 outgoing wire transfers over the course of the interval, funding a number of cryptocurrency accounts managed by unidentified third events.
The DOJ says Hanes’ motion finally precipitated the financial institution to fail and the buyers to lose $9 million albeit the Federal Deposit Insurance coverage Company (FDIC) absorbed the $47.1 million loss.
Says U.S. Legal professional Kate E. Brubacher,
“Hanes’ greed knew no bounds. He trespassed his skilled obligations, his private relationships, and federal regulation. Not solely did Shan Hanes betray Heartland Financial institution and its buyers, however his unlawful schemes additionally jeopardized confidence in monetary establishments.”
The Client Monetary Safety Bureau, which reviewed the losses, says HTSB had about $139 million in belongings earlier than it failed in 2023. The company additionally raised the alarm about related schemes that might compromise monetary establishments.
“We’re recommending that the Board elevate consciousness amongst banks of cryptocurrency scams and practice examiners on such scams and related preventive and detective controls at banks.”
Hanes was sentenced on Monday after pleading responsible to at least one depend of embezzlement by a financial institution officer.
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