Local US Bank Shut Down after CEO Lost Millions in Crypto Scam
Heartland Tri-State Bank, a community bank in Elkhart, Kansas, has been forced to shut down after its CEO, Shan Hanes, lost millions of dollars in a cryptocurrency scam.
The incident unfolded on July 5 when Hanes, desperate to retrieve his money from a supposed cryptocurrency investment, approached one of his wealthy clients with a peculiar request, according to a recent report from Bloomberg.
Per the report, the banker asked the client to lend him $12 million, promising to repay the loan with an additional $1 million in interest after just 10 days.
Hanes said he was investing in crypto with the help of someone else and claimed that there were some wire payment issues, which needed an infusion of more funds.
The client, a local farmer, ultimately declined to provide the loan, suspecting it to be a crypto scam.
He even reportedly advised Hanes to go to Hong Kong in order to recover the money.
However, after discovering that Hanes had indeed wired the $12 million, the farmer took the matter to a member of Heartland's board.
Consequently, the Kansas Office of the State Bank Commissioner launched an investigation into the bank and declared it insolvent on July 28.
The closure of Heartland Tri-State Bank has sent shockwaves through Elkhart, a tight-knit community where the bank played a vital role.
As one of only two banks in town, Heartland was deeply embedded in the fabric of the community, sponsoring local events and providing financial assistance to those in need.
The Federal Deposit Insurance Corp. (FDIC), which was appointed as the bank's receiver, has estimated a loss of $54 million from its insurance fund to protect depositors.
The substantial loss is an indication of the severity of the situation, given that Heartland had
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