U.S. Attorney Kate E. Brubacher | U.S. Department of Justice
After a significant cryptocurrency scheme led to the failure of a Kansas bank, a federal judge has ordered that millions of dollars seized by the government be distributed among investors who suffered financial losses. The $47.1 million scam resulted in the collapse of Heartland Tri-State Bank and substantial losses for its investors.
In August 2024, Shan Hanes, 53, from Elkhart, was sentenced to nearly 24 and a half years in prison after pleading guilty to embezzlement by a bank officer. As the CEO of Heartland Tri-State Bank, Hanes conducted unauthorized wire transfers from the bank's funds to a cryptocurrency wallet owned by third parties. This fraudulent activity caused the bank's downfall and approximately $9 million in losses for its investors.
The Federal Bureau of Investigation (FBI) successfully recovered $8 million related to this fraud case. U.S. Attorney Kate E. Brubacher expressed gratitude towards the FBI's efforts: “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.”
The investigation involved multiple agencies including 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 prosecuted this case.
