Ex-banker jailed for 24 years over crypto deal — spent $47 million from bank, daughter’s college and church

In the vain hope of getting rich using cryptocurrencies, the former banker fell for the scam and spent $47 million of the bank’s funds, as well as all available personal and public funds. Now the 53-year-old US man is facing 24 years in prison.

The U.S. Attorney’s Office notes that Shan Hanes was motivated by «greed» when he ordered bank employees to transfer millions of dollars to a dubious crypto wallet. It was operated by a still unidentified group of third parties behind the fraudulent scheme. The banker first became a target of fraudsters in late 2022, when he received a message from an unknown co-conspirator on WhatsApp.

• Shan Haines embezzled his own funds through promises of profits, stole tens of thousands from a local church, then from a local investors’ club, and finally from his daughter’s college fund.
• When he ran out of money, he started stealing bank funds — in the vain hope that sending more and more money to the scammers would somehow «unlock the supposed return» on his cryptocurrency investment.
• In total, Hanes made 11 bank transfers between May 2023 and July 2023.
• Instead of getting rich quick, Hanes never made any profit at all, prosecutors say.
• Hanes single-handedly caused the collapse of Heartland Tri-State Bank (HTSB) in Elkhart, Kansas.

Since the bank was insured by the Federal Deposit Insurance Corporation (FDIC), it covered a loss of $47.1 million after Hanes’ fraudulent actions led to HTSB’s bankruptcy, and the bank’s investors lost $9 million. In addition to these losses, Hanes’s actions caused «catastrophic losses to the bank’s customers who relied on the safety of their savings», — the prosecutor’s office said in a press release.

In particular, Hanes asked his neighbor, Brian Mitchell, for a $12 million loan. «I said, «You’re in a scam, get out,» Mitchell says. The executive then ordered bank employees to transfer millions more to the fraudsters. Mitchell heard about this from a bank employee and insisted on talking to the board.

A few days later, Hanes was fired. But even then, Hanes did not believe he had been defrauded and told Mitchell that he still planned to find a way to recover his phantom profits, right up until the moment of his arrest: «He said. «If I had two more months, I could get the money back».

Mr. Hanes faced a maximum sentence of 30 years. Judge John Broomes gave him a shorter sentence. However, the sentence of more than 24 years is 29 months longer than prosecutors had asked for.

It is unclear how and when the victims will be compensated. The US Attorney’s Office reported that Judge Broomes ordered «to complete restitution at a separate hearing within the next 90 days».

In the local community, people are still trying to recover from the shock. Some have lost up to 80% of their retirement savings. For at least one woman, retirement is now impossible, and for another local woman, it has become difficult to pay for a nursing home for her 93-year-old mother.

Sources: NBC, Ars Techica