Heartland Tri-State Bank in Kansas failed after CEO Shan Hanes caused $47 million in wire transfers to be sent to scammers running a pig butchering scheme.
The former CEO of a small Kansas bank was sentenced to more than 24 years in prison for looting the bank of $47 million.
During the sentencing hearing,"I called his actions 'pure evil,'"said Brian Mitchell, who for years was Hanes' next-door neighbor in Elkhart, a town of 2,000 or so people in southwestern Kansas, north of the Oklahoma panhandle. Mitchell, who was not a shareholder but who belonged to the investment club victimized by the CEO, said Hanes showed little, if any, remorse for his actions, despite hearing victims tell the judge about the effects of his crime.
That scheme was described in a court filing as"a scammer convincing a victim to invest in supposedly legitimate virtual currency investment opportunities and then steals the victim's money — butchering the pig." He also used $60,000 taken from a daughter's college fund, and nearly $1 million in stock from the Elkhart Financial Corporation, his lawyer said in a filing.
Hanes told bank employees to execute the wire transfers, and"made many misrepresentations to various people" to get access to the funds so they could be transferred, prosecutors wrote. Heartland Tri-State employees circumvented the bank's own wire policy and daily limits to approve Hanes' wire transfers, according to a report by the Office of the Inspector General of the Board of Governors of the Federal Reserve System.
Mitchell, who had survived prostate cancer two decades ago, said he thought Hanes was calling him to say that he had the same type of cancer. Hanes then hold him he had been in touch with a banker in Denver named"Jim" and"another guy in Oklahoma" and they had invested in crypto held in Coinbase accounts, where they had made a lot of money, Mitchell said.
But later that same day, after Mitchell rebuffed his entreaties, Hanes had bank employees wire $8 million to the scammers' accounts, prosecutors said in a court filing.In the meantime, Mitchell, who was unaware of those transfers during that period, said that after meeting with the CEO he was worried that Hanes would get access to customers' deposits at the bank and transfer the $12 million that he had asked for.
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