Former executive convicted of embezzling millions of dollars from his community bank since bankrupt was banned from banking.

The Federal Reserve earlier this week banned Shan Hanesformer CEO of Bank of the Heartland Tri-State in Elkhart, Kansas, after working in a bank, serving on a bank board, or working for a bank-affiliated company.

The action comes after Hanes pleaded guilty to embezzling some $47 million in bank funds and funneling them into his own crypto wallet before transferring them to several unidentified third parties who turned out to be scammers. The theft contributed to the bank’s deterioration and eventual bankruptcy in July 2023.

After the failure, Heartland Tri-State’s $139 million in assets were absorbed by Syracuse, Kansas-based Dream First Bank, but the episode still resulted in losses for the Insurance Fund -deposits.

Following this failure, the DIF had to absorb a loss of 47 million dollars to restore peace to depositors. The bank’s shareholders lost another $9 million. As part of a criminal settlement, Hanes agreed to pay $60.5 million in restitution.

His actions also earned him significant prison sentences. In August, he was sentenced to 293 months – or almost 24.5 years – in prison after pleading guilty to one count of embezzlement by a bank employee.

The Justice Department said Hanes was the victim of a “pig butchery” scam, in which bad actors befriend someone and persuade them to funnel money into fake investments cryptographic. Such schemes typically involve the scammer showing fake earnings that make an investment appear legitimate and profitable to entice the target to contribute more.

“Mr. Hanes, as CEO of Heartland Tri-State Bank, held the trust of the community of Elkhart, Kansas, but he violated that trust,” said Stephen Cyrus, Special Agent in Charge of the Field Office of the FBI in Kansas City. , in a written statement earlier this year. “He attempted to profit financially by embezzling funds from the bank. His get-rich-quick idea, in reality, was a pig slaughtering scheme. His involvement in this scheme ultimately led to the collapse of the “His job, the bank’s job, was to protect its customers and identify fraudulent scams – not to participate in them.”