The ex-CEO of Heartland Tri-State Financial institution in Kansas has been indicted for allegedly diverting $47.1 million from the financial institution’s reserves into cryptocurrency investments.
The Elkhart, Kansas-based establishment’s CEO, Shane Hanes, additionally appeared earlier than Congress a number of instances to debate the significance of neighborhood banks.
In response to federal courtroom paperwork, Hanes is accused of huge monetary misappropriation from the financial institution and embezzling funds from a neighborhood church. The case’s filings additionally revealed {that a} native businessman, Brian Mitchell, was additionally approached by Hanes for a mortgage. The previous CEO talked about that the mortgage was to assist him withdraw funds from a crypto funding.
Bloomberg studies instructed Hanes had invested buyer funds from the financial institution and the church since 2022. Finally, the financial institution incurred the key financial loss, forcing it to shut down. Nevertheless, the involvement of the Federal Deposit Insurance coverage Company (FDIC) helped the financial institution return buyer funds, however its operation couldn’t proceed.
Though such scams have been widespread in the previous couple of years, with Sam Bankman-Fried’s FTX saga nonetheless recent on the minds of crypto lovers, the incident was outdoors of the norm, given it occurred in a city of simply 1,800 residents.