According to Bloomberg: Former CEO of Heartland Tri-State Bank, Shan Hanes, has been charged with embezzling $47.1 million from the bank to invest in cryptocurrencies. Additionally, prosecutors allege Hanes took money from a local church.
The bank's failure disturbed the largely invested local community of Elkhart, Kansas. Hanes, a previous advocate for the mission of community banks before Congress, has not responded to queries about the charges brought against him.
Interestingly, Brian Mitchell, a client of the bank who contributed to unveiling the alleged embezzlement, supposes Hanes might have been a target of a scam himself. Mitchell grew suspicious upon Hanes's request for a multi-million dollar loan allegedly needed to withdraw his money from a crypto investment.
The filing suggests Hanes commenced buying cryptocurrencies with personal funds in 2022. By 2023, he had started embezzling from the church and an investment club, subsequently turning to bank funds. The alleged scheme emerged last summer when Hanes requested a $12 million loan from Mitchell.
Hanes allegedly committed at least 11 wire transfers of bank funds from May through July, driving the bank to closure and appointing FDIC as the receiver. Whether Hanes fell victim to a scam called "pig butchering," where victims are tricked into pouring more money into fraudulent investment schemes, remains uncertain. Mitchell hopes that these charges will raise awareness about crypto fraud and help the community heal from the bank's scandalous downfall.