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8/22/24, 12:30 PM

Sentencing of Kansas failed-bank CEO delayed

Sentencing of Kansas failed-bank CEO delayed American Banker Online - Powered by Dow Jones · Jim Dobbs US | August 12, 2024 · 12:00am Shan Hanes, the ex-CEO of failed Heartland Tri-State Bank who pleaded guilty earlier this year to stealing millions of dollars from the Elkhart, Kansas-based lender before it failed, will have to wait several more days for his sentence in U.S. District Court. Hanes, 52, admitted on May 23 to embezzling the funds from the $139 million-asset Heartland Tri State and its customers. He was charged in February. Facing up to 30 years in prison, he was originally scheduled for sentencing on Aug. 8. A judge postponed sentencing to Aug. 19, a spokeswoman for prosecutors with the U.S. attorney's office in Wichita, Kansas, told American Banker Monday. A reason for the delay was not immediately available. Prosecutors said that, from May to July 2023, Hanes initiated a series of 10 outgoing wire transfers totaling $47.1 million of Heartland's funds to a cryptocurrency wallet. The money was then transferred to multiple crypto accounts controlled by unidentified third parties. "Even as he was squandering away tens of millions of dollars in cryptocurrency, Hanes orchestrated schemes to cover his tracks concerning the losses at the bank," U.S. Attorney Kate Brubacher said in a statement. Hanes, who could not be reached for comment, admitted in court to embezzling bank funds, causing the bank to fail. Prosecutors said Hanes took money from multiple customer accounts, including one held by a local church.

Prosecutors said Hanes lied to the bank's board, investors and employees about the wire transfers. Federal authorities estimated that shareholders lost between $9.3 million and $13.4 million.

The Kansas Office of the State Bank Commissioner shuttered Heartland Tri-State and the Federal Deposit Insurance Corp. seized the bank on July 28 of last year. Dream First Bank of Syracuse, Kansas, assumed all of its deposits.

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