Relief filled a federal courtroom in Wichita, Kansas, on Monday as dozens of individuals learned that the FBI had recovered the funds embezzled from them by a former bank CEO. Victims of a sweeping scam involving cryptocurrency accounts, many of the affected individuals were shareholders and lifelong customers who had trusted their life savings with Shan Hanes, the former head of Heartland Tri-State Bank.
“I just can’t describe the weight lifted off of us,” said Bart Camilli, 70, who, with his wife Cleo, was among those assured recovery of close to $450,000 — funds he had diligently saved since his first retirement account at age 18. “It’s lifechanging.”
The relief follows Hanes’ conviction in August, where he was sentenced to 24 years in prison for embezzling $47 million from bank customers and channeling the funds into cryptocurrency accounts. Prosecutors disclosed that Hanes also took $40,000 from his church, $10,000 from an investment club, and $60,000 from his daughter’s college fund, ultimately losing over $1.1 million of his own money in a scam he couldn’t escape. Aaron Smith, prosecuting the case, stated that customers’ deposits were “jettisoned into the ether.”
The Heartland Tri-State Bank was ultimately closed by federal regulators due to cash depletion and later sold to another institution. While the Federal Deposit Insurance Corporation (FDIC) insured customer deposits, covering the $47.1 million loss, Heartland’s 30 shareholders were left facing significant financial devastation. Many had planned their retirements, healthcare expenses, and family legacies around the rural bank’s shares, only to see $8.3 million vanish overnight.
On Monday, the shareholders stood and cheered when Judge John W. Broomes assured them they would be fully reimbursed, thanks to FBI efforts in recovering the funds from a cryptocurrency account held by Tether Ltd. in the Cayman Islands. Margaret Grice, one of the victims, had anticipated recovering only $1,000. She was astonished to learn she would get back nearly $250,000 — her entire 401(k). “I’m just really thrilled,” she said. “I can breathe.”
The “Pig Butchering” Scam That Deceived a Bank CEO
Court documents reveal that Hanes fell victim to a scam often referred to as “pig butchering,” where scammers cultivate trust with their target over time before convincing them to invest large sums. In Hanes’ case, a contact on WhatsApp convinced him to start with a $5,000 cryptocurrency investment in late 2022. Believing his investment was growing, he soon transferred funds from personal and third-party accounts, including his church and an investment club, into what he thought was a rapidly appreciating account.
Hanes escalated his investments in the summer of 2023, transferring $47.1 million from Heartland Tri-State Bank’s customer accounts over just eight weeks. Each transfer, he was told, was essential to cash out. Meanwhile, a fake website showed his account balance rising to over $200 million.
Hanes’ attorney, John Stang, explained, “He was to take some of the money, and the rest of the money was supposed to go back to the bank. Now it’s fiction, it didn’t exist. We all know that now … It failed big time.”
In a previous court appearance, Hanes expressed remorse. “From the deepest depth of my soul, I had no intention of ever causing the harm that I did,” he said. “I’ll forever struggle to understand how I was duped and how what I thought was just getting the money back was making it worse.”
Prosecutors argued that Hanes’ actions went beyond victimhood in a scam, as he broke legal and ethical boundaries by misappropriating customer funds and violating banking regulations. He pleaded guilty to embezzlement by a bank officer in May.
An Unlikely Downfall for a Community Leader
As CEO of Heartland Tri-State Bank, Hanes was a respected figure in his Kansas town of 2,000, where he served on the school board, volunteered in community activities, and held a seat on the Kansas Bankers Association. His influence extended nationally, with appearances before Congressional committees and a directorship at the American Bankers Association.
A Federal Reserve investigation found that Hanes’ community standing likely enabled him to act without scrutiny, leveraging trust to conceal his financial maneuvers. Prosecutors on Monday indicated that the FDIC aims to recover the $47.1 million it reimbursed to customers, but Judge Broomes ruled that the shareholders — “who became insolvent because of a fraud scheme” — should be repaid before any FDIC claims.
Now 53, Hanes may be in his late 70s upon release and is unlikely to repay the FDIC, considering the massive debt owed.
In a court statement, Hanes and his attorney acknowledged the stark consequences of his decisions. “Mr. Hanes made some very bad choices after being caught up in an extremely well-run cryptocurrency scam,” the filing stated. “He was the pig that was butchered.”
