Shareholders in a Kansas bank that collapsed after the CEO embezzled millions from the bank in a crypto investment scheme will get some of their money back after the FBI recovered about US$8 million.
In mid-2023, Heartland Tri-State Bank failed, and its shareholders lost all of their equity after the CEO, Shan Hanes, transferred US$47.1 million of the bank’s funds to a so-called pig butchering crypto scheme.
Earlier this year, Hanes was sentenced to 293 months in prison after he pled guilty to one count of embezzlement by a bank officer.
The U.S. Federal Deposit Insurance Corp. absorbed the US$47.1-million loss, but the bank’s shareholders lost US$9 million in equity when the bank collapsed.
Following a hearing on restitution, a federal judge ordered that the US$8 million in lost funds that the FBI was able to recover from the crypto scheme will be divided among the bank’s investors who suffered financial losses when the bank failed.
“Through Hanes’ conviction and prison sentence, the Department of Justice obtained justice for the victims, and now with this court order, those victims will receive some financial relief,” said U.S. attorney, Kate Brubacher, in a release Monday.