6 ms·

Ex-bank CEO gets 24 years after falling for crypto scam, causing bank collapse

86 points by isaacfrond 2y ago

s_dev 2y ago
You would think a Bank CEO would have more financial acumen than falling for this nonsense. 24 years seems appropriate.
- jacknews 2y ago
  Indeed, yet these scam gangs (often whole office buildings filled) are popping up like weeds, and there's nothing here about trying to catch the scam gang. Is it even illegal, it must be fraud, at least.
  - mylastattempt 2y ago
    Usually a matter of jurisdiction (US law enforcement doesn't hold much effective power in Cambodia, China, Nigeria, etc)
- knifie_spoonie 2y ago
  "falling for a cryptocurrency scam that he believed would make him wildly rich" Greed is a powerful force
  - NayamAmarshe 2y ago
    The best thing about gambling is that the one losing everything thinks he's gonna win. It's voluntary robbing.
- jongjong 2y ago
  When something sounds so outrageous, you have to wonder what the full story is. It can't be as simple as the article suggests. A bank CEO would have a solid understanding of debt and interest. I suspect he must have seen a legitimate opportunity but he didn't account for the human side of the equation that the crypto would be a rug pull. Assuming you control a bank to such extent, you could potentially keep up a scheme going forever provided that you leave enough safety margins for interest rate increases. I bet there are people running such schemes and getting away with them as we speak. For example, you can loan money to someone you trust to buy crypto assets, if you and your friends hold most of the coins, you can achieve essentially any market cap you want... For example, you can spend $1000 a day to buy 1000 coins per day from your friend... You can move those newly purchased tokens back and forth 1000 times between different accounts so that your trading volume hits like $1 million per day. If you have 1 billion coins in circulation, your crypto's market cap is now $1 billion dollar... Becoming a billionaire on paper is easy! It's basically the same thing that happens with stock markets except that the stock market involves more participants. If you don't believe that this can work, consider that this is exactly how the banking system at large operates. It keeps borrowing new, increasing amounts of money into existence to pay back the old debts, using the inflating nominal value of collateral to justify the increasing size of the new loans. Literally the only difference is that in that case, it involves many real people moving money in a circle instead of one person moving money in a circle.
roenxi 2y ago
"Falling for a crypto scam" doesn't really do it justice. He appears to have been under a spell of insanity and committing various crimes. Although how the bank was in a situation where one man could pilfer funds like that seems like a questionable aspect, surely there were other bank employees who should have been aware of and preventing the madness. It is hard to see this happening and everyone around him agreeing that the CEO was competent for the role.
- lupusreal 2y ago
  He used his authority at the bank to induce bank employees under him to break the banks own rules and policies. I do wonder if some of them suspected but decided to give their idiot boss enough rope to hang himself with...
  - roenxi 2y ago
    I don't know about you, but if the CEO came to me and said "send all the money to my bank account" [0] at most companies I'd expect there to be a policy where I check that the CFO at least knows about it. Maybe informally send him a Slack message even. CEOs aren't gods, there are limits on what they can do. It seems a bit wild that this wouldn't be immediately picked up by the executive team, payments halted and the CEO fired over the course of 4-8 hours. So quickly that there is basically no crime and nothing to prosecute. This crime was exactly the sort of things banks are designed not to do. [0] In this case it was a couple of payments, but sending bank money to a private account is a red flag. We're talking blood red, rose red, angry-bull red red flags. It isn't a minor request.
    - lupusreal 2y ago
      > So quickly that there is basically no crime and nothing to prosecute. But what if you hate your boss? I think a lot of people might do as their boss says if he's an asshole and they realize he's going to land in prison if they go along with his orders.
      - 2y ago
devjab 2y ago
Isn’t the headline a little click-baity? He got 24 years because of embezzlement. Sure it was because he fell for a crypto scam, but he stole the money… Maybe it’s just me, but I was thinking he did it by accident.
lupusreal 2y ago
If anybody thinks this is too harsh a punishment for being a retard who fell for an obvious scam, note that he wasn't merely a retard but a thief as well. If he had only given the scammer his own money he wouldn't be faced with this prison time, but the absolute idiot went and stole other people's money and gave it to the scammer.
TheDong 2y ago
The problem isn't so much "falling for the scam", as "stealing from the bank". Even if, for example, you find a loophole that allows you to make 100% guaranteed money, the deposits of the bank belong to the bank, they are not the personal funds of the CEO. Like, putting money in treasuries is basically 100% safe. It's fine for the bank to put the money in treasuries and profit. It's highly illegal for the bank CEO to take 20 million from the bank, use it as personal funds, buy personal treasuries, and then put the money back. The title makes it sound like the problem was that he was an idiot and fell for a scam. The true problem was that he misappropriated bank funds in the process of doing so... and if there's any one person you should expect to understand that line, it would be the CEO of a company (or I guess CFO if you have to pick one, but if you pick two it's CFO and CEO)
- b112 2y ago
  Another real life example of this, but with an employee: https://en.m.wikipedia.org/wiki/Owning_Mahowny https://en.m.wikipedia.org/wiki/Owning_Mahowny
  - chompychop 2y ago
    This also reminds of how an employee single-handedly brought down UK's second oldest merchant bank at the time, by speculative trading: https://en.m.wikipedia.org/wiki/Nick_Leeson https://en.m.wikipedia.org/wiki/Nick_Leeson
    - netsharc 2y ago
      This makes me wonder about the trader working for a French bank who supposedly traded too much after bypassing the limits because he understood how to edit the Visual Basic Script macros in Excel... But Googling and DDGing "french bank collapse visual basic" didn't get me the story, but it got me results about SVB (Silicon Valley Bank) collapse. Why do I have the feeling the super-clever algorithms saw that Visual Basic is shortened to VB, and thought "Oh 'VB' is in 'SVB', he's asking about a bank, results about SVB must be relevant to this query!"
sva_ 2y ago
prev https://news.ycombinator.com/item?id=41314542 https://news.ycombinator.com/item?id=41314542
jonasdegendt 2y ago
The article claims the bank's losses were insured by the federal government, yet it closes by saying some people that banked there are having financial trouble. How's this work? Aren't the bank's losses essentially people's deposits? Where'd the insurance money go then, or has it simply not yet been paid out?
- AlexDragusin 2y ago
  > Deposits are insured up to at least $250,000 per depositor, per FDIC-insured bank, per ownership category. https://www.fdic.gov/resources/deposit-insurance/faq https://www.fdic.gov/resources/deposit-insurance/faq
- TacoSteemers 2y ago
  Insurance is always up to a certain amount. In the Netherlands the government-provided insurance insures up to €100k per account holder. People would have a problem if they already have €120k tied up in a contract, such as a house purchase. It would be a big problem if the lost money was intended for their pension.
  - jonasdegendt 2y ago
    I understand that, except the reported insured amount matches the reported amount of money lost in the scam, so as much as it adds up, it doesn't square with the rest of the article.
- yawpitch 2y ago
  The FDIC insures deposit accounts (savings, checking, money market deposit accounts, and certificates of deposit) only and there’s a cap of $250K at any single institution. I’ve no idea what accounts this bank offered, but anything in excess of that cap or held in, for example, mutual funds, stocks, etc are uninsured losses. Those people the article mentioned specifically called out retirement savings, so they very well may not have been in insured deposit accounts.
- tialaramex 2y ago
  FDIC ensures certain deposits, within limits. If the bank fails, which is my superficial understanding here, FDIC will make you whole if you had a secured deposit within those limits, although not instantly, but it doesn't cover deposits either beyond those limits or which were never guaranteed. A typical high street bank account is always covered, but maybe you've put the $1.5M Grandma left you in there, that's too much, or maybe instead of the normal bank account you obtained some weird investment vehicle that's not technically a bank account but, you know, it's from a bank - well, the paperwork did say "Not FDIC insured" and sure enough it isn't FDIC insured so if the bank fails too bad. In most bank failures a large fraction of the money is eventually recovered but it takes ages. Maybe you had $1M with a bank, the bank fails on Monday, $250k is FDIC insured, on Monday you can't get your money, this can be very disruptive. Can't make car payment, can't pay tuition, whatever. But hey by first thing Wednesday FDIC gives you access to $250k. Six months later the people cleaning up the mess maybe give you $607 283 from selling the bulk of the bank's assets, and then six years later, when you've almost forgotten this disaster, you get a letter with a further $114 384.10 as the last bits and pieces were settled, and it turns out one of the hard to unwind bank investments was actually quite profitable, although it was supposed to pay much earlier. Congratulations, the vast majority of your money was "recovered". Not all of it, and not quickly, but bank failures generally do not mean there's an empty vault.
jongjong 2y ago
In his defense, given that the entire banking industry has become a scam, it can be difficult to see where the line is.
captn3m0 2y ago
> Because the bank was insured by the Federal Deposit Insurance Corporation (FDIC), the FDIC "absorbed the $47.1 million loss" > Right now, it's unclear how or when victims will be repaid for losses. Broomes ordered "that restitution be finalized at a separate hearing within the next 90 days," the US Attorney's Office said. Many victims will never fully recoup losses to their life savings and retirement funds Can someone explain how are these two statements compatible?
- a_dabbler 2y ago
  I think the losses by people who deposited money in the bank are covered but when the bank collapsed the bank investors lost a further 9m$, the investors are not covered by FDIC insurance
- banksRus 2y ago
  The victims are the shareholders who were wiped out when the bank went under. The FDIC made the depositors whole, but not the other parts of the bank's capital structure.
- wheybags 2y ago
  Fdic only covers $250k per person. If you had more than that in your account, you're out of luck.
  - winternewt 2y ago
    But the text says that the FDIC absorbed the _entire_ loss
- rchaud 2y ago
  The deposits were assumed by Dream First Bank of Syracuse, Kansas, according to this article: https://www.nbcnews.com/business/business-news/cryptocurrency-pig-butchering-scam-wrecks-kansas-bank-sends-ex-ceo-pri-rcna167642 https://www.nbcnews.com/business/business-news/cryptocurrenc...
- epc 2y ago
  There were other victims who were not insured by the FDIC because he stole from their non-bank funds: “After blowing through his own funds seeking promised profits, Hanes stole tens of thousands from a local church, then a local investor club, and finally his daughter's college fund, NBC News reported.”
throwadobe 2y ago
> After he asked for a $12 million loan from a neighbor, Brian Mitchell, his neighbor detected the scam and refused to lend the money. Who asks their neighbors for $12 million? The dude was out of his mind. 24 years seems long but at the same time somewhat deserved given his role and the amount of damage his sheer stupidity inflicted.
- larusso 2y ago
  To quote Nicolas Cage in Gone in 60 seconds: [in a Ferrari dealership] Roger the Car Salesman: My name's Roger, sir. May I be of some help? Memphis: That's funny, my name's Roger... Two Rogers don't make a right. [laughs] Memphis: Roger, I have a problem... Roger the Car Salesman: Yes? Memphis: I've been in L.A. for three months now. I have money, I have taste. But I'm not on anybody's "A" list, and Saturday night is the loneliest night for the week for me. Roger the Car Salesman: Well, a Ferrari would certainly change that. Memphis: Perhaps, mmm. But, you know, this is the one. Yes, yes yes... I saw three of these parked outside the local Starbucks this morning, which tells me only one thing. There's too many self-Indulgent wieners in this city with too much bloody money! Now, if I was driving a 1967 275 GTB four-cam... Roger the Car Salesman: You would not be a self-indulgent wiener, sir... You'd be a connoisseur. Memphis: Precisely. Champagne would fall from the heavens. Doors would open. Velvet ropes would part. I think this person and its neighbors are just living in a different world. A world where a million is similar to what us is a grant or something.
  - BobaFloutist 2y ago
    Would you lend your neighbor $12,000 for a random investment scheme they just told you about?
ChrisArchitect 2y ago
[dupe] Discussion: https://news.ycombinator.com/item?id=41314542 https://news.ycombinator.com/item?id=41314542
- 1123581321 2y ago
  The CNBC article is much better, too. The Ars article seems to be confusing HN readers about the role the bank played in the town as an investment.
deleted 2y ago
[deleted]
nunez 2y ago
> Because the bank was insured by the Federal Deposit Insurance Corporation (FDIC), the FDIC "absorbed the $47.1 million loss" after "Hanes’ fraudulent actions caused HTSB to fail and the bank investors to lose $9 million," the US Attorney's Office said. On top of those losses, Hanes' fraudulent actions caused "catastrophic losses to bank customers who relied on the bank for the safekeeping of their savings," the press release confirmed. Thank goodness for the FDIC here. A win for "big government."
big-green-man 2y ago
He didn't get 24 hears for falling for a crypto scam. He got 24 years for embezzling money. It was just his stupidity that got himself cammed out of the embezzled money. He'd be in prison even if he had made a hefty profit with the proceeds.
johnbruder 2y ago
[flagged]
- deleted 2y ago
  [deleted]
- tasuki 2y ago
  Yes sure, watching Netflix and killing people by accident is bad. But embezzling this amount of money has surely had very bad consequences for the affected people? And it was done on purpose! It makes sense to me he gets five times the prison time...
  - lupusreal 2y ago
    The criminal negligence of watching Netflix while driving wasn't an accident though... 5 years does seem very low, but I guess I'm not surprised given it happened in Canada.
- BobaFloutist 2y ago
  It's weird that you thought it was relevant to mention that the truck driver was an immigrant. It's not just me, right? Isn't that weird?
grouchomarx 2y ago
>Three days later he directed two wire transfers totaling $6.7 million to be sent by the bank to the crypto wallet, and a whopping $10 million less than two weeks later, and another $3.3 million days afterward. that's gold medal scamming right there. Almost unbelievable

86 points by isaacfrond 2y ago

s_dev 2y ago

You would think a Bank CEO would have more financial acumen than falling for this nonsense. 24 years seems appropriate.

jacknews 2y ago
Indeed, yet these scam gangs (often whole office buildings filled) are popping up like weeds, and there's nothing here about trying to catch the scam gang. Is it even illegal, it must be fraud, at least.
- mylastattempt 2y ago
  Usually a matter of jurisdiction (US law enforcement doesn't hold much effective power in Cambodia, China, Nigeria, etc)
knifie_spoonie 2y ago
"falling for a cryptocurrency scam that he believed would make him wildly rich" Greed is a powerful force
- NayamAmarshe 2y ago
  The best thing about gambling is that the one losing everything thinks he's gonna win. It's voluntary robbing.
jongjong 2y ago
When something sounds so outrageous, you have to wonder what the full story is. It can't be as simple as the article suggests. A bank CEO would have a solid understanding of debt and interest. I suspect he must have seen a legitimate opportunity but he didn't account for the human side of the equation that the crypto would be a rug pull. Assuming you control a bank to such extent, you could potentially keep up a scheme going forever provided that you leave enough safety margins for interest rate increases. I bet there are people running such schemes and getting away with them as we speak. For example, you can loan money to someone you trust to buy crypto assets, if you and your friends hold most of the coins, you can achieve essentially any market cap you want... For example, you can spend $1000 a day to buy 1000 coins per day from your friend... You can move those newly purchased tokens back and forth 1000 times between different accounts so that your trading volume hits like $1 million per day. If you have 1 billion coins in circulation, your crypto's market cap is now $1 billion dollar... Becoming a billionaire on paper is easy! It's basically the same thing that happens with stock markets except that the stock market involves more participants. If you don't believe that this can work, consider that this is exactly how the banking system at large operates. It keeps borrowing new, increasing amounts of money into existence to pay back the old debts, using the inflating nominal value of collateral to justify the increasing size of the new loans. Literally the only difference is that in that case, it involves many real people moving money in a circle instead of one person moving money in a circle.

roenxi 2y ago

"Falling for a crypto scam" doesn't really do it justice. He appears to have been under a spell of insanity and committing various crimes. Although how the bank was in a situation where one man could pilfer funds like that seems like a questionable aspect, surely there were other bank employees who should have been aware of and preventing the madness. It is hard to see this happening and everyone around him agreeing that the CEO was competent for the role.

lupusreal 2y ago
He used his authority at the bank to induce bank employees under him to break the banks own rules and policies. I do wonder if some of them suspected but decided to give their idiot boss enough rope to hang himself with...
- roenxi 2y ago
  I don't know about you, but if the CEO came to me and said "send all the money to my bank account" [0] at most companies I'd expect there to be a policy where I check that the CFO at least knows about it. Maybe informally send him a Slack message even. CEOs aren't gods, there are limits on what they can do. It seems a bit wild that this wouldn't be immediately picked up by the executive team, payments halted and the CEO fired over the course of 4-8 hours. So quickly that there is basically no crime and nothing to prosecute. This crime was exactly the sort of things banks are designed not to do. [0] In this case it was a couple of payments, but sending bank money to a private account is a red flag. We're talking blood red, rose red, angry-bull red red flags. It isn't a minor request.
  - lupusreal 2y ago
    > So quickly that there is basically no crime and nothing to prosecute. But what if you hate your boss? I think a lot of people might do as their boss says if he's an asshole and they realize he's going to land in prison if they go along with his orders.
    - 2y ago

devjab 2y ago

Isn’t the headline a little click-baity? He got 24 years because of embezzlement. Sure it was because he fell for a crypto scam, but he stole the money… Maybe it’s just me, but I was thinking he did it by accident.

lupusreal 2y ago

If anybody thinks this is too harsh a punishment for being a retard who fell for an obvious scam, note that he wasn't merely a retard but a thief as well. If he had only given the scammer his own money he wouldn't be faced with this prison time, but the absolute idiot went and stole other people's money and gave it to the scammer.

TheDong 2y ago

The problem isn't so much "falling for the scam", as "stealing from the bank". Even if, for example, you find a loophole that allows you to make 100% guaranteed money, the deposits of the bank belong to the bank, they are not the personal funds of the CEO. Like, putting money in treasuries is basically 100% safe. It's fine for the bank to put the money in treasuries and profit. It's highly illegal for the bank CEO to take 20 million from the bank, use it as personal funds, buy personal treasuries, and then put the money back. The title makes it sound like the problem was that he was an idiot and fell for a scam. The true problem was that he misappropriated bank funds in the process of doing so... and if there's any one person you should expect to understand that line, it would be the CEO of a company (or I guess CFO if you have to pick one, but if you pick two it's CFO and CEO)

b112 2y ago
Another real life example of this, but with an employee: https://en.m.wikipedia.org/wiki/Owning_Mahowny https://en.m.wikipedia.org/wiki/Owning_Mahowny
- chompychop 2y ago
  This also reminds of how an employee single-handedly brought down UK's second oldest merchant bank at the time, by speculative trading: https://en.m.wikipedia.org/wiki/Nick_Leeson https://en.m.wikipedia.org/wiki/Nick_Leeson
  - netsharc 2y ago
    This makes me wonder about the trader working for a French bank who supposedly traded too much after bypassing the limits because he understood how to edit the Visual Basic Script macros in Excel... But Googling and DDGing "french bank collapse visual basic" didn't get me the story, but it got me results about SVB (Silicon Valley Bank) collapse. Why do I have the feeling the super-clever algorithms saw that Visual Basic is shortened to VB, and thought "Oh 'VB' is in 'SVB', he's asking about a bank, results about SVB must be relevant to this query!"

sva_ 2y ago

prev https://news.ycombinator.com/item?id=41314542 https://news.ycombinator.com/item?id=41314542

jonasdegendt 2y ago

The article claims the bank's losses were insured by the federal government, yet it closes by saying some people that banked there are having financial trouble. How's this work? Aren't the bank's losses essentially people's deposits? Where'd the insurance money go then, or has it simply not yet been paid out?

AlexDragusin 2y ago
> Deposits are insured up to at least $250,000 per depositor, per FDIC-insured bank, per ownership category. https://www.fdic.gov/resources/deposit-insurance/faq https://www.fdic.gov/resources/deposit-insurance/faq
TacoSteemers 2y ago
Insurance is always up to a certain amount. In the Netherlands the government-provided insurance insures up to €100k per account holder. People would have a problem if they already have €120k tied up in a contract, such as a house purchase. It would be a big problem if the lost money was intended for their pension.
- jonasdegendt 2y ago
  I understand that, except the reported insured amount matches the reported amount of money lost in the scam, so as much as it adds up, it doesn't square with the rest of the article.
yawpitch 2y ago
The FDIC insures deposit accounts (savings, checking, money market deposit accounts, and certificates of deposit) only and there’s a cap of $250K at any single institution. I’ve no idea what accounts this bank offered, but anything in excess of that cap or held in, for example, mutual funds, stocks, etc are uninsured losses. Those people the article mentioned specifically called out retirement savings, so they very well may not have been in insured deposit accounts.
tialaramex 2y ago
FDIC ensures certain deposits, within limits. If the bank fails, which is my superficial understanding here, FDIC will make you whole if you had a secured deposit within those limits, although not instantly, but it doesn't cover deposits either beyond those limits or which were never guaranteed. A typical high street bank account is always covered, but maybe you've put the $1.5M Grandma left you in there, that's too much, or maybe instead of the normal bank account you obtained some weird investment vehicle that's not technically a bank account but, you know, it's from a bank - well, the paperwork did say "Not FDIC insured" and sure enough it isn't FDIC insured so if the bank fails too bad. In most bank failures a large fraction of the money is eventually recovered but it takes ages. Maybe you had $1M with a bank, the bank fails on Monday, $250k is FDIC insured, on Monday you can't get your money, this can be very disruptive. Can't make car payment, can't pay tuition, whatever. But hey by first thing Wednesday FDIC gives you access to $250k. Six months later the people cleaning up the mess maybe give you $607 283 from selling the bulk of the bank's assets, and then six years later, when you've almost forgotten this disaster, you get a letter with a further $114 384.10 as the last bits and pieces were settled, and it turns out one of the hard to unwind bank investments was actually quite profitable, although it was supposed to pay much earlier. Congratulations, the vast majority of your money was "recovered". Not all of it, and not quickly, but bank failures generally do not mean there's an empty vault.

jongjong 2y ago

In his defense, given that the entire banking industry has become a scam, it can be difficult to see where the line is.

captn3m0 2y ago

> Because the bank was insured by the Federal Deposit Insurance Corporation (FDIC), the FDIC "absorbed the $47.1 million loss" > Right now, it's unclear how or when victims will be repaid for losses. Broomes ordered "that restitution be finalized at a separate hearing within the next 90 days," the US Attorney's Office said. Many victims will never fully recoup losses to their life savings and retirement funds Can someone explain how are these two statements compatible?

a_dabbler 2y ago
I think the losses by people who deposited money in the bank are covered but when the bank collapsed the bank investors lost a further 9m$, the investors are not covered by FDIC insurance
banksRus 2y ago
The victims are the shareholders who were wiped out when the bank went under. The FDIC made the depositors whole, but not the other parts of the bank's capital structure.
wheybags 2y ago
Fdic only covers $250k per person. If you had more than that in your account, you're out of luck.
- winternewt 2y ago
  But the text says that the FDIC absorbed the _entire_ loss
rchaud 2y ago
The deposits were assumed by Dream First Bank of Syracuse, Kansas, according to this article: https://www.nbcnews.com/business/business-news/cryptocurrency-pig-butchering-scam-wrecks-kansas-bank-sends-ex-ceo-pri-rcna167642 https://www.nbcnews.com/business/business-news/cryptocurrenc...
epc 2y ago
There were other victims who were not insured by the FDIC because he stole from their non-bank funds: “After blowing through his own funds seeking promised profits, Hanes stole tens of thousands from a local church, then a local investor club, and finally his daughter's college fund, NBC News reported.”

throwadobe 2y ago

> After he asked for a $12 million loan from a neighbor, Brian Mitchell, his neighbor detected the scam and refused to lend the money. Who asks their neighbors for $12 million? The dude was out of his mind. 24 years seems long but at the same time somewhat deserved given his role and the amount of damage his sheer stupidity inflicted.

larusso 2y ago
To quote Nicolas Cage in Gone in 60 seconds: [in a Ferrari dealership] Roger the Car Salesman: My name's Roger, sir. May I be of some help? Memphis: That's funny, my name's Roger... Two Rogers don't make a right. [laughs] Memphis: Roger, I have a problem... Roger the Car Salesman: Yes? Memphis: I've been in L.A. for three months now. I have money, I have taste. But I'm not on anybody's "A" list, and Saturday night is the loneliest night for the week for me. Roger the Car Salesman: Well, a Ferrari would certainly change that. Memphis: Perhaps, mmm. But, you know, this is the one. Yes, yes yes... I saw three of these parked outside the local Starbucks this morning, which tells me only one thing. There's too many self-Indulgent wieners in this city with too much bloody money! Now, if I was driving a 1967 275 GTB four-cam... Roger the Car Salesman: You would not be a self-indulgent wiener, sir... You'd be a connoisseur. Memphis: Precisely. Champagne would fall from the heavens. Doors would open. Velvet ropes would part. I think this person and its neighbors are just living in a different world. A world where a million is similar to what us is a grant or something.
- BobaFloutist 2y ago
  Would you lend your neighbor $12,000 for a random investment scheme they just told you about?

ChrisArchitect 2y ago

[dupe] Discussion: https://news.ycombinator.com/item?id=41314542 https://news.ycombinator.com/item?id=41314542

1123581321 2y ago
The CNBC article is much better, too. The Ars article seems to be confusing HN readers about the role the bank played in the town as an investment.

deleted 2y ago

[deleted]

nunez 2y ago

> Because the bank was insured by the Federal Deposit Insurance Corporation (FDIC), the FDIC "absorbed the $47.1 million loss" after "Hanes’ fraudulent actions caused HTSB to fail and the bank investors to lose $9 million," the US Attorney's Office said. On top of those losses, Hanes' fraudulent actions caused "catastrophic losses to bank customers who relied on the bank for the safekeeping of their savings," the press release confirmed. Thank goodness for the FDIC here. A win for "big government."

big-green-man 2y ago

He didn't get 24 hears for falling for a crypto scam. He got 24 years for embezzling money. It was just his stupidity that got himself cammed out of the embezzled money. He'd be in prison even if he had made a hefty profit with the proceeds.

johnbruder 2y ago

[flagged]

deleted 2y ago
[deleted]
tasuki 2y ago
Yes sure, watching Netflix and killing people by accident is bad. But embezzling this amount of money has surely had very bad consequences for the affected people? And it was done on purpose! It makes sense to me he gets five times the prison time...
- lupusreal 2y ago
  The criminal negligence of watching Netflix while driving wasn't an accident though... 5 years does seem very low, but I guess I'm not surprised given it happened in Canada.
BobaFloutist 2y ago
It's weird that you thought it was relevant to mention that the truck driver was an immigrant. It's not just me, right? Isn't that weird?

grouchomarx 2y ago

>Three days later he directed two wire transfers totaling $6.7 million to be sent by the bank to the crypto wallet, and a whopping $10 million less than two weeks later, and another $3.3 million days afterward. that's gold medal scamming right there. Almost unbelievable