After a $47.1 million cryptocurrency scheme led to the failure of a Kansas bank, a federal judge has ruled that seized funds will be distributed among affected investors. The restitution hearing determined that millions recovered by the government will go towards compensating those who incurred financial losses.
In August 2024, Shan Hanes, 53, from Elkhart, was sentenced to nearly 25 years in prison following his guilty plea for embezzlement as a bank officer. As CEO of Heartland Tri-State Bank (HTSB), Hanes orchestrated unauthorized wire transfers from the bank to external cryptocurrency wallets, resulting in the bank's collapse and approximately $9 million in investor losses.
The Federal Bureau of Investigation (FBI) managed to retrieve $8 million linked to the fraudulent activities.
“The U.S. Attorney’s Office – District of Kansas thanks the FBI for its diligent investigations that led to the discovery and recovery of over $8 million in stolen funds. Through Hanes’ conviction and prison sentence, the Department of Justice obtained justice for the victims, and now with this court order, those victims will receive some financial relief,” stated U.S. Attorney Kate E. Brubacher.
The investigation involved several agencies: the FBI, Federal Deposit Insurance Corporation – Office of Inspector General (FDIC-OIG), Federal Reserve Board - Office of Inspector General (FRB-OIG), and Federal Housing Finance Agency – Office of Inspector General (FHFA-OIG).
Assistant U.S. Attorney Aaron Smith led the prosecution.