Former Kansas Bank CEO Charged in $47M Crypto Embezzlement

Kelvin Munene Murithi
February 8, 2024
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CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.
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Highlights

  • Former Kansas bank CEO Shan Hanes accused of embezzling $47.1M for crypto investments, including funds from a local church.
  • Heartland Tri-State Bank's collapse shook Elkhart, leaving 1,800 residents facing losses from investments.
  • Brian Mitchell's suspicions uncovered Hanes's alleged embezzlement scheme.

A former Kansas Bank CEO is accused of embezzling $ 47.1 million from the lender to invest in cryptocurrency investments. Shan Hanes, the former leader of Heartland Tri-State Bank which folded in July, is also charged with embezzling money from a local church. The details of this incredible case were disclosed by prosecutors’ filing in Wichita district court.

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A Devastating Blow to the Community

The shutdown of Heartland Tri-State Bank left the Elkhart community reeling in shock, which is a small town with around 1800 people. Last year, regulators and investigators swarmed over the city, leaving residents with losses from bank investments. The impact of this bank failure has rocked the community, and many people are still recovering from its financial effects.

The bank’s collapse started to unwind when Brian Mitchell, a local entrepreneur and Heartland Tri-State Bank customer, became suspicious of Hanes’s behavior. Mitchell was essential in the alleged embezzlement revelation, where the Kansas Bank CEO had requested a loan to retrieve the money he invested in cryptocurrency. However, Mitchell grew more and more suspicious of the situation, calling it a “pig butchering” scam where victims are tricked into offering even larger amounts of money, like pigs being fattened for slaughter.

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Kansas Bank CEO’s Role

This case becomes even more shocking given that Hanes’ previous role was as a community bank champion. He had appeared several times before Congress to state the importance of these institutions. This sharp difference between his public activism and alleged criminal activities has shocked many people.

Fortunately, depositors were not hurt by the bank’s closure. Located in Syracuse, Kansas, Dream First Bank bought Heartland Tri-State Bank to secure customer deposits. Nevertheless, this does not reduce the huge losses suffered by those who invested their money in banks. Mitchell, the key player in revealing the embezzlement activities, is not an investor in that bank.

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The CEO’s Alleged Scheme

Following the latest disclosure, Hanes began buying crypto in 2022 from his funds. Nevertheless, by early 2023, he had been accused of misappropriating funds from the local church and an investment club in Elkhart before eventually turning to the bank. However, the scheme began to crumble when Hanes approached Mitchell, asking for a loan of $12 million so that he could take his money out from the crypto investment.

The Kansas Bank CEO promised to repay the loan in 10 days and offered Mitchell $ 1 million in interest. Mitchell doubted whether the funds were from a bank and Hanes reassured him that they did not come from there.

Mitchell’s doubts were not baseless, as victims of virtual currency investment scams have amassed billions in the United States alone. These frauds target naive people with big returns on investments, but ultimately, they are left empty-handed. The case of Hanes proves there is a need to raise awareness and guardianship against cryptocurrency fraud.

A Step Towards Healing

For Mitchell, the charges against the Kansas Bank CEO symbolize a major milestone toward justice and closure. As a prominent whistleblower in this case, he hopes the truth will finally come out and allow Elkhart to heal. Perhaps only equaled by his anger on behalf of the bank’s investors, who have lost a lot, is Mitchell’s disillusionment with Hanes, whom he used to consider as one of his friends.

Read Also: Bitcoin Mining Firm BitFuFu to Go Public via SPAC Merger Hinting Higher Demand

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Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.

Why Trust CoinGape

CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights Read more…to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.

About Author
About Author
Kelvin Munene is a crypto and finance journalist with over 5 years of experience, offering in-depth market analysis and expert commentary . With a Bachelor's degree in Journalism and Actuarial Science from Mount Kenya University, Kelvin is known for his meticulous research and strong writing skills, particularly in cryptocurrency, blockchain, and financial markets. His work has been featured across top industry publications such as Coingape, Cryptobasic, MetaNews, Cryptotimes, Coinedition, TheCoinrepublic, Cryptotale, and Analytics Insight among others, where he consistently provides timely updates and insightful content. Kelvin’s focus lies in uncovering emerging trends in the crypto space, delivering factual and data-driven analyses that help readers make informed decisions. His expertise extends across market cycles, technological innovations, and regulatory shifts that shape the crypto landscape. Beyond his professional achievements, Kelvin has a passion for chess, traveling, and exploring new adventures.
Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.