ELKHART– A former Elkhart Bank president will face up to 30 years in prison and tens of millions in fines for lying to cover his tracks after he invested Bank funds in a bogus crypto currency scam.
Shan Hanes, 52 of Elkhart, pleaded guilty to using his position as a bank executive to embezzle millions of dollars causing the Elkhart bank to fail at a complete loss of equity for investors. Hanes pleaded guilty to one count of embezzlement by a bank officer in a plea deal with federal prosecutors in U.S. District Court in Wichita in May.
Hanes previously served as chief executive officer (CEO) of Heartland Tri-State Bank (HTSB) in Elkhart, where form May 2023 to July 2023 he initiated a series of 10 outgoing wire transfers totaling $47.1 million of Heartland’s funds to a cryptocurrency wallet, federal prosecutors say. The funds were transferred to multiple cryptocurrency accounts controlled by unidentified third parties during the time HTSB was insured by the Federal Deposit Insurance Corporation.
Haynes was charged in February and negotiated a plea deal in which he admitted that he communicated through WhatsApp with an unidentified individual regarding investing in crypto currency. Hanes pulled funds from multiple accounts at the bank including a local church to initiate the series of wire transfers that totaled more than $47 million and sent those funds to a cryptocurrency wallet. Investigators said Haynes was suckered by what con man call a pig butchering, convincing a naive victim to forward money for an investment that doesn’t exist.
Elkhart Is a town of about 1,800 people in the extreme southwest corner of Kansas. Bank shareholders lost between $9.3 million and $13.4 million, according to court records. Depositors were covered by FDIC insurance. The FDIC seized the bank’s assets and it was later acquired by a bank in Syracuse.
“Shan Hanes is a liar and a master manipulator who caused Heartland Tri-State Bank to collapse. Even as he was squandering away tens of millions of dollars in cryptocurrency, Hanes orchestrated schemes to cover his tracks concerning the losses at the bank,” said U.S. Attorney Kate E. Brubacher. “Many victims will never fully recoup losses to their life savings and retirement funds, but at least we at the Department of Justice can see that Hanes is held criminally responsible for his actions.”
“Shan Hanes exploited his position as a bank executive to commit fraud and embezzle funds that ultimately led to Tri-State Bank’s failure,” said Jon Ellwanger, Federal Reserve agent charge of the investigation.
Hanes is scheduled to be sentenced on August 8, 2024, and faces a maximum of 30 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The Federal Bureau of Investigation (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) investigaterd the case.
Dane Hicks is a graduate of the University of Missouri School of Journalism and the United States Marine Corps Officer Candidate School at Quantico, VA. He is the author of novels "The Skinning Tree" and "A Whisper For Help." As publisher of the Anderson County Review in Garnett, KS., he is a recipient of the Kansas Press Association's Boyd Community Service Award as well as more than 60 awards for excellence in news, editorial and photography.
