The former CEO of HTSB Bank in the United States embezzled tens of millions of dollars to participate in a cryptocurrency scam, leading to the bank's collapse

2024-08-20 13:46:28

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ChainCatcher news reports that, according to an announcement from the U.S. Department of Justice, a Kansas man has been sentenced to 293 months in prison for embezzling tens of millions of dollars through a cryptocurrency scheme while serving as the former CEO of a bank, leading to the bank's collapse and total loss of investor equity.

During his tenure as CEO of Heartland Tri-State Bank (HTSB) in Elkhart, Kansas, Hanes initiated 11 wire transfers from Heartland's $47.1 million in funds to a cryptocurrency wallet between May 2023 and July 2023, in a scheme referred to as "pig butchering." While HTSB was insured by the Federal Deposit Insurance Corporation (FDIC), these funds were transferred to multiple cryptocurrency accounts controlled by unidentified third parties. The FDIC absorbed the $47.1 million loss. Hanes's fraudulent activities resulted in HTSB's bankruptcy, causing bank investors to lose $9 million. A federal judge has ordered a separate hearing to be held within the next 90 days to finalize compensation matters.

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