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Shan Hanes, former CEO of Heartland Tri-State Bank in Elkhart, Kansas, was sentenced on August 19, 2024, to 293 months in prison—24 years and five months—after pleading guilty to embezzlement by a bank officer. From May through July 2023, he initiated 11 wire transfers totaling $47.1 million from the bank to cryptocurrency accounts controlled by third parties. The transfers caused the bank to fail, according to federal oversight agencies.
What happened at Heartland Tri-State Bank?
Hanes was deceived by an apparent cryptocurrency investment scam, but the criminal conduct at the center of the case was his use of bank funds. The FBI says online perpetrators persuaded him to invest in a scheme promising high returns. Rather than limiting his losses to personal money, he used his position as CEO to move $47.1 million belonging to Heartland Tri-State Bank into accounts controlled by third parties.
The Federal Reserve Board and FDIC inspector general offices said the transfers caused the Kansas bank to fail in July 2023. The official accounts identify the destination accounts as controlled by third parties; they do not identify those parties.
How the scam worked
The FBI describes the scheme as “pig-butchering”: a fraud pattern in which perpetrators build trust and encourage a victim to put increasing amounts into an investment platform that appears profitable. When the victim tries to withdraw money, the funds are inaccessible. In Hanes’ case, the FBI says he began with a few thousand dollars in 2022 and was drawn into what he believed was a cryptocurrency investment.
Being deceived by the scheme does not change the separate legal finding about his actions at the bank. Hanes pleaded guilty to one count of embezzlement by a bank officer, not merely to losing his own investment.
Sentence and key dates
| Date | What happened |
|---|---|
| 2022 | According to the FBI’s later account, Hanes began investing a few thousand dollars in what he thought was cryptocurrency. |
| May–July 2023 | He initiated 11 wires totaling $47.1 million from Heartland funds to cryptocurrency accounts controlled by third parties. |
| July 2023 | Heartland Tri-State Bank failed after the fraud was uncovered, according to federal oversight agencies and the FBI. |
| August 19, 2024 | Hanes, then 53 and from Elkhart, Kansas, pleaded guilty to bank-officer embezzlement and was sentenced to 293 months. |
| November 4, 2024 | A federal judge ordered recovered funds distributed among investors at a restitution hearing. |
| March 26, 2025 | The FBI published a retrospective account of the investigation and reported that more than $8 million had been seized. |
The 293-month sentence is 24 years and five months; “24 years” is a rounded description. The Federal Reserve Board OIG said a bank CEO has an obligation to operate a bank with sound judgment, integrity and honesty. The District of Kansas U.S. Attorney described the sentence as accountability for violating a position of trust.
Who lost money, and how much?
The reported figures describe different losses and should not be added together as though they measure one category:
- $47.1 million: the amount transferred from Heartland and the loss the FDIC absorbed, according to the Federal Reserve Board and FDIC inspector general releases.
- About $9 million: losses to bank investors reported by those same oversight releases.
- More than $8.2 million affecting about 30 local shareholders: the FBI’s March 2025 account describes the shareholders’ losses in this way. It is a more specific account of investor impact, not the FDIC’s separate $47.1 million loss.
The FBI says many of the affected shareholders were local people in southwest Kansas whose net worth was tied up in the bank. Its March 2025 account also cites more than 69,000 public complaints in 2023 involving financial fraud with a cryptocurrency nexus, with estimated losses exceeding $5.6 billion. Those are nationwide complaint and loss figures, not totals for the Heartland case.
What happened to the recovered money?
Investigators traced funds to an offshore digital wallet and seized more than $8 million, according to the FBI. The U.S. Attorney’s Office release about the November 4, 2024 restitution hearing described $8 million as recovered and said the judge ordered recovered funds divided among investors. The FBI later reported that shareholders were told in November 2024 they would be made nearly whole.
The available releases do not give a final accounting of how much each investor received. The seizure and restitution order therefore establish that funds were recovered and distribution was ordered, but not the final payment to any individual shareholder.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Why this case matters to bank customers and investors
The case illustrates two distinct risks: a convincing investment scam can lead someone to keep sending money, and a person with control over an institution’s funds can inflict losses far beyond their own. Hanes’ guilty plea and the bank’s collapse make clear that the scam’s alleged deception does not excuse embezzlement.
For anyone evaluating an online investment opportunity, the FBI’s description points to a warning sign: an account or platform showing apparent gains is not proof that those gains are real or that money can be withdrawn. Promises of high returns paired with pressure to increase deposits deserve particular scrutiny. The scale of the Heartland transfers, however, reflects the actions of its CEO, not losses ordinary bank depositors should infer from the shareholder figures.
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Sources
- Federal Reserve Board Office of Inspector General: Former CEO of Failed Bank Sentenced to Prison, August 19, 2024.
- FDIC Office of Inspector General: Former CEO of failed bank sentenced to prison, August 19, 2024.
- FBI: FBI Recovers Money Swindled from Kansas Bank’s Investors, March 26, 2025.
- U.S. Attorney’s Office, District of Kansas: Victims of cryptocurrency scam awarded restitution, November 4, 2024.
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