Residents of Wichita, Kansas, experienced a mix of emotions in a federal courtroom as they learned that federal law enforcement had successfully recovered funds embezzled by a former bank CEO. The CEO, Shan Hanes, was sentenced to 24 years for stealing $47 million from customer accounts and transferring the money to cryptocurrency accounts operated by scammers.
Victims, including individuals like Bart Camilli, expressed relief upon discovering that their life savings would be returned. The recovery process was particularly significant for Camilli, who had saved close to $450,000 since the age of 18 in his individual retirement account.
Following the embezzlement, Hanes' Heartland Tri-State Bank was closed by federal regulators and sold to another financial institution. The Federal Deposit Insurance Corp. insured customers' savings and checking accounts, amounting to $47.1 million, and reimbursed their losses.
However, 30 shareholders of the bank, including close family friends and neighbors of Hanes, believed they had lost $8.3 million in investments. These shareholders faced financial turmoil, with retirement plans disrupted and education funds depleted.
During a court session, Judge John W. Broomes informed the shareholders that they would be fully reimbursed. The FBI successfully recovered the funds from a cryptocurrency account held by Tether Ltd. in the Cayman Islands.
Hanes' involvement in a cryptocurrency scam, known as 'pig butchering,' led to the loss of millions. He transferred substantial amounts from customer accounts under the belief that he was investing in cryptocurrency, only to realize that the funds had vanished.
Despite expressing remorse for his actions, Hanes was held accountable for embezzlement by a bank officer. His prominent status in the community facilitated his fraudulent activities, as he held positions on the school board and within banking associations.
While the FDIC sought repayment for insurance claims, Judge Broomes prioritized reimbursing shareholders who suffered due to the fraud scheme. Hanes, now facing a lengthy sentence, may struggle to repay the outstanding $47.1 million owed to the FDIC.
In a court filing, Hanes and his attorney attributed his actions to falling victim to a sophisticated cryptocurrency scam, acknowledging the severe consequences of his choices.