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Former Heartland Bank CEO gets 24 years after putting bank funds into crypto

18 points by ilamont 2y ago

ilamont 2y ago
Official DOJ release: https://www.justice.gov/usao-ks/pr/former-ceo-failed-bank-sentenced-prison https://www.justice.gov/usao-ks/pr/former-ceo-failed-bank-se...
basementcat 2y ago
Material Loss Review from Federal Reserve System provides more detail. https://oig.federalreserve.gov/reports/board-material-loss-review-heartland-tri-state-bank-feb2024.pdf https://oig.federalreserve.gov/reports/board-material-loss-r...
pcthrowaway 2y ago
This is a dishonest headline. He got 24 years for embezzlement. He did not put any money in crypto, he sent it to scammers who led him to believe it was being invested in crypto.
- basementcat 2y ago
  The Material Loss Review (linked below and elsewhere) provides details of the "pig butchering" scam, wire transfers to crypto platforms and mentions that $8-$12 million worth of crypto may be recoverable (but would not be enough to restore the bank's required capital). https://oig.federalreserve.gov/reports/board-material-loss-review-heartland-tri-state-bank-feb2024.pdf https://oig.federalreserve.gov/reports/board-material-loss-r...
0cf8612b2e1e 2y ago
Between May and July of 2023, Hanes transferred $47.1 million of the bank's funds to the fraudulent scheme. This ultimately led to the bank collapsing, with equity investors losing $9 million and the FDIC footing the bill. "There were people who lost 70, 80% of their retirement" as a result of their investment losses, stated a community member. Woof. Not sure what was his game plan. Smuggle out $47 million in three months, double it in crypto, return the original, and sit pretty? If the bank compliance controls were so bad he could sneak off with that much, he probably could have just squirreled away a couple of million without anybody noticing.
- RandomThoughts3 2y ago
  He is a bank CEO. If he wanted to get a couple of millions out of the bank, he could probably have just sat there until his retirement collecting his pay check. Foolproof plan.
olliej 2y ago
While I guess “crypto” makes the headlines, this seems to just be garden variety embezzlement, only I this case the embezzlement was to support an “investment” that was itself fraud. It’s not functionally any different from if the money was lost due to him embezzling and putting it into madoff’s fund or Enron, etc I’d add an additional note though: bro was a bank CEO yet fell for a blazingly obvious scam, so it seems like the people who put him there should have to answer questions about their approach to ensuring he was competent for the position.

18 points by ilamont 2y ago

Official DOJ release: https://www.justice.gov/usao-ks/pr/former-ceo-failed-bank-sentenced-prison https://www.justice.gov/usao-ks/pr/former-ceo-failed-bank-se...

basementcat 2y ago

Material Loss Review from Federal Reserve System provides more detail. https://oig.federalreserve.gov/reports/board-material-loss-review-heartland-tri-state-bank-feb2024.pdf https://oig.federalreserve.gov/reports/board-material-loss-r...

pcthrowaway 2y ago

This is a dishonest headline. He got 24 years for embezzlement. He did not put any money in crypto, he sent it to scammers who led him to believe it was being invested in crypto.

basementcat 2y ago
The Material Loss Review (linked below and elsewhere) provides details of the "pig butchering" scam, wire transfers to crypto platforms and mentions that $8-$12 million worth of crypto may be recoverable (but would not be enough to restore the bank's required capital). https://oig.federalreserve.gov/reports/board-material-loss-review-heartland-tri-state-bank-feb2024.pdf https://oig.federalreserve.gov/reports/board-material-loss-r...

0cf8612b2e1e 2y ago

Between May and July of 2023, Hanes transferred $47.1 million of the bank's funds to the fraudulent scheme. This ultimately led to the bank collapsing, with equity investors losing $9 million and the FDIC footing the bill. "There were people who lost 70, 80% of their retirement" as a result of their investment losses, stated a community member. Woof. Not sure what was his game plan. Smuggle out $47 million in three months, double it in crypto, return the original, and sit pretty? If the bank compliance controls were so bad he could sneak off with that much, he probably could have just squirreled away a couple of million without anybody noticing.

RandomThoughts3 2y ago
He is a bank CEO. If he wanted to get a couple of millions out of the bank, he could probably have just sat there until his retirement collecting his pay check. Foolproof plan.

olliej 2y ago

While I guess “crypto” makes the headlines, this seems to just be garden variety embezzlement, only I this case the embezzlement was to support an “investment” that was itself fraud. It’s not functionally any different from if the money was lost due to him embezzling and putting it into madoff’s fund or Enron, etc I’d add an additional note though: bro was a bank CEO yet fell for a blazingly obvious scam, so it seems like the people who put him there should have to answer questions about their approach to ensuring he was competent for the position.