By admin 
There were cheers and sobs of relief in a federal courtroom in Kansas as dozens of people whose life savings had been embezzled by a bank’s CEO learned that federal law enforcement had recovered their money.
WICHITA, KANSAS — Sobs of relief erupted Monday in a federal courtroom in Kansas as dozens of people whose life savings had been embezzled by a bank CEO learned that federal law enforcement had recovered their money.
“I just can’t describe how much weight has been lifted from us,” said Bart Camilli, 70, who, along with his wife Cleo, had just learned they would get nearly $450,000 back — money Bart started saving at age 18 when he bought his first individual pension. account. “It’s life-changing.”
In August, former Kansas Bank CEO Shan Hanes was sentenced to 24 years after stealing $47 million from customer accounts and transferring the money to scammers’ cryptocurrency accounts. Prosecutors said Hanes also stole $40,000 from his church, $10,000 from an investment club and $60,000 from his daughter’s college fund, and that he himself lost $1.1 million in the scheme. Deposits were “thrown into the ether,” prosecutor Aaron Smith said.
Hanes’ cashless Heartland Tri-State Bank was closed by federal regulators and sold to another financial institution. Customers’ savings and checking accounts worth $47.1 million were insured by the Federal Deposit Insurance Corp., which paid out their losses.
But there were still 30 shareholders of the community-run rural bank that Hanes helped found – including his immediate family, friends and neighbors – who believed they had lost $8.3 million in investments: well-planned pensions were being thrown into jeopardy , funds for long-term elderly care disappeared, education funds and legacies for children and grandchildren were reset to zero.
On Monday, shareholders stood to cheer federal Judge John W. Broomes in Wichita after he told them one by one they would be repaid in full. The FBI recovered the money from a Tether Ltd cryptocurrency account. in the Cayman Islands.
During an earlier sentencing hearing, these victims had called Hanes a “deceitful deceiver and a liar” and “pure evil.”
Margaret Grice came to court Monday thinking she would get $1,000 back. Instead, she learned she would get nearly $250,000 back, her entire 401(k).
“I’m just really happy,” she said. “I can breathe.”
Prosecutors said Hanes, CEO of Heartland Tri-State Bank in Elkhart, Kansas, lost the money in a scam called “pig slaughter,” or the way pigs are fattened before slaughter. The scam involves a third party gaining the victims’ trust and over time convincing them to invest all their money in cryptocurrency, which immediately disappears. That’s what American and UN officials say these schedules are spreading, with scammers, especially in Southeast Asia, increasingly taking advantage of Americans.
Hanes began buying what he thought was $5,000 worth of cryptocurrency in late 2022 while communicating with someone who had contacted them via WhatsApp, court records show. A few months later, he transferred the funds of his church and investment club. Records show the scam accelerated in the summer of 2023, when Hanes transferred $47.1 million from customer accounts in 11 wire transfers in just eight weeks. He said each transfer was necessary to close and pay out the investment, according to court records. He watched on a fake website as the money appeared to grow to more than $200 million.
“He would take some of the money, and the rest of the money would go back to the bank,” his attorney John Stang explained. “Now it’s fiction, it didn’t exist. We all know that now… It was a huge failure.’
Hanes, who was not in court Monday, apologized during an earlier sentencing hearing.
“From the depths of my soul, I had no intention of ever causing the damage I did,” he said. which makes it even worse.”
Prosecutors said Hanes was not only the victim of a scam, but that he crossed a line when he began taking money from customers and violating banking rules. He pleaded guilty to embezzlement by a bank official in May.
His prominent position in his hometown of 2,000 inhabitants made it easier for him to get away with it Research by the Federal Reserve System found; he had served on the school board, volunteered as a swim meet official and was a member of the Kansas Bankers Association.
He was also a banking leader outside his rural community. In recent years, he has testified before congressional committees about the importance of local banks in farming communities and served as director of the American Bankers Association, which represents nearly all banking assets in the US.
On Monday, prosecutors said the FDIC wanted to be reimbursed for insurance claims it reimbursed bank customers. But Judge Broomes said the economic circumstances of shareholders “who have become insolvent due to a fraud scheme” warrant that they be repaid first before the FDIC gets anything back.
Hanes, 53, may be in his late 70s when he is released and is unlikely to be able to pay the FDIC the $47.1 million still owed.
In a lawsuit, Hanes and his attorney tried to explain what happened.
“Mr. Hanes made some very poor choices after getting caught up in an extremely well-executed cryptocurrency scam,” they said. “He was the pig that was slaughtered.”