Current:Home > BackA courtroom of relief: FBI recovers funds for victims of scammed banker-LoTradeCoin
A courtroom of relief: FBI recovers funds for victims of scammed banker
View Date:2024-12-23 23:04:16
WICHITA, KANSAS (AP) — Sobs of relief broke out in a federal courtroom in Kansas on Monday as dozens of people whose life savings had been embezzled by a bank CEO learned that federal law enforcement had recovered their money.
“I just can’t describe the weight lifted off of us,” said Bart Camilli, 70, who with his wife Cleo had just learned they’d recover close to $450,000 — money Bart began saving at 18 when he bought his first individual retirement account. “It’s life-changing.”
In August, former Kansas bank CEO Shan Hanes was sentenced to 24 years after stealing $47 million from customer accounts and wiring the money to cryptocurrency accounts run by scammers. Prosecutors said Hanes also stole $40,000 from his church, $10,000 from an investment club and $60,000 from his daughter’s college fund and lost $1.1 million of his own in the scheme. Deposits were “jettisoned into the ether,” said prosecutor Aaron Smith.
Hanes’ Heartland Tri-State Bank, drained of cash, was shut down by federal regulators and sold to another financial institution. Customers’ savings and checking accounts amounting to $47.1 million were insured by the Federal Deposit Insurance Corp., which paid off their losses.
But there were still 30 shareholders of the community-owned rural bank Hanes helped found — including his close family friends and neighbors — who thought they lost $8.3 million in investments: well-planned retirements were upended, funds for long-term eldercare gone, education funds and bequests for children and grandchildren zeroed out.
On Monday the shareholders stood to cheer federal Judge John W. Broomes in Wichita after he told them, one at a time, that they’d be paid back in full. The FBI recovered the funds from a cryptocurrency account held by Tether Ltd. in the Cayman Islands.
During an earlier sentencing hearing, these victims had called Hanes a “deceitful cheat and a liar,” and “pure evil.”
Margaret Grice came to court Monday figuring she’d get $1,000 back. Instead, she learned she’d be recovering almost $250,000, her entire 401(k).
“I’m just really thrilled,” she said. “I can breathe.”
Prosecutors said Hanes, who was the CEO of Heartland Tri-State Bank in Elkhart, Kansas, lost the money in a scam referred to as “pig butchering,” or the way pigs are fattened before slaughter. In the scam, a third party gains a victims’ trust and, over time, convinces them to invest all of their money into cryptocurrency, which immediately disappears. U.S. and U.N. officials say these schemes are proliferating, with scammers largely in Southeast Asia increasingly taking advantage of Americans.
Hanes started buying what he thought was $5,000 in cryptocurrency in late 2022, communicating with someone who had reached out on WhatsApp, according to court records. A few months later he transferred over his church and investment club funds. Records show the scam accelerated in the summer of 2023, when Hanes wired $47.1 million out of customer accounts in 11 wire transfers over just eight weeks. Each transfer, he thought, was necessary to end the investment and cash out, court records said. He watched, on a fake website, as the money appeared to grow to more than $200 million.
“He was to take some of the money, and the rest of the money was supposed to go back to the bank,” his attorney John Stang explained. “Now it’s fiction, it didn’t exist. We all know that now ... It failed big time.”
Hanes, who was not in court Monday, apologized at an earlier sentencing hearing.
“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 said Hanes wasn’t just the victim of a scam, he crossed a line when he began taking customers’ money and violating banking regulations. He pleaded guilty to embezzlement by a bank officer in May.
His prominent standing in his hometown of 2,000 made it easier for him to get away with it, a Federal Reserve System investigation found; he had been on the school board, volunteered as a swim meet official, and served on the Kansas Bankers Association.
He also was a banking leader beyond his rural community. In recent years, he testified to Congressional committees about the importance of local banks in farming communities, and he served as a director for the American Bankers Association, which represents almost all banking assets in the U.S.
On Monday, prosecutors said the FDIC wanted to be paid back for the insurance claims it reimbursed to bank customers. But Judge Broomes said the economic circumstances of shareholders “who became insolvent because of a fraud scheme” justified paying them back first, before the FDIC recovers anything.
Hanes, 53, may be in his late 70s when he is released and is unlikely to be able to pay the FDIC the $47.1 million still owed.
In a court filing, Hanes and his attorney tried to explain what had happened.
“Mr. Hanes made some very bad choices after being caught up in an extremely well-run cryptocurrency scam,” they said. “He was the pig that was butchered.”
veryGood! (42)
Related
- Lululemon, Disney partner for 34-piece collection and campaign: 'A dream collaboration'
- Is a State Program to Foster Sustainable Farming Leaving Out Small-Scale Growers and Farmers of Color?
- Travis Scott Will Not Face Criminal Charges Over Astroworld Tragedy
- New Research Shows Aerosol Emissions May Have Masked Global Warming’s Supercharging of Tropical Storms
- Tropical Storm Sara threatens to bring flash floods and mudslides to Central America
- The U.S. Military Emits More Carbon Dioxide Into the Atmosphere Than Entire Countries Like Denmark or Portugal
- Charlie Sheen and Denise Richards’ Daughter Sami Shares Her Riskiest OnlyFans Photo Yet in Sheer Top
- Amid Punishing Drought, California Is Set to Adopt Rules to Reduce Water Leaks. The Process has Lagged
- California Gov. Gavin Newsom will spend part of week in DC as he tries to Trump-proof state policies
- 'Leave pity city,' MillerKnoll CEO tells staff who asked whether they'd lose bonuses
Ranking
- Fantasy football Week 11: Trade value chart and rest of season rankings
- Laid off on leave: Yes, it's legal and it's hitting some workers hard
- The Current Rate of Ocean Warming Could Bring the Greatest Extinction of Sealife in 250 Million Years
- Nature’s Say: How Voices from Hawai’i Are Reframing the Climate Conversation
- Gossip Girl Actress Chanel Banks Reported Missing After Vanishing in California
- In San Francisco’s Most Polluted Neighborhood, the Polluters Operate Without Proper Permits, Reports Say
- Inflation eased in March but prices are still climbing too fast to get comfortable
- Taylor Swift, Keke Palmer, Austin Butler and More Invited to Join the Oscars’ Prestigious Academy
Recommendation
-
MLS Star Marco Angulo Dead at 22 One Month After Car Crash
-
Gloomy global growth, Tupperware troubles, RIP HBO Max
-
Bill Gates on next-generation nuclear power technology
-
Search continues for 9-month-old baby swept away in Pennsylvania flash flooding
-
Sister Wives’ Janelle Brown Alleges Ex Kody Made False Claims About Family’s Finances
-
Twitter labels NPR's account as 'state-affiliated media,' which is untrue
-
Researchers Say Science Skewed by Racism is Increasing the Threat of Global Warming to People of Color
-
Biden Administration Stops Short of Electric Vehicle Mandates for Trucks