WICHITA, KANSAS — Emotional reactions filled a federal courtroom in Kansas on Monday as multiple individuals learned that their funds embezzled by a former bank CEO had been successfully recovered by federal authorities.
Bart Camilli, 70, expressed immense relief, stating, “I just can’t describe the weight lifted off of us,” upon discovering that he and his wife Cleo would regain approximately $450,000—a sum Bart had started saving when he acquired his first individual retirement account at the age of 18. “It’s life-changing,” he added.
The courtroom proceedings related to the case of Shan Hanes, the former CEO of a Kansas bank, who was sentenced to 24 years in prison for misappropriating $47 million from client accounts and funnelling the money into cryptocurrency schemes orchestrated by fraudsters. Along with the funds destined for clients, Hanes also misappropriated $40,000 from a church, $10,000 from an investment group, and $60,000 from his daughter’s college fund, while losing $1.1 million of his own funds in the process. Prosecutor Aaron Smith described the clients’ deposits as being “jettisoned into the ether.”
As a result of the financial turmoil, Heartland Tri-State Bank, which Hanes had helped establish, was forced to close by federal regulators and subsequently sold to another institution. The Federal Deposit Insurance Corporation insured customers’ accounts totaling $47.1 million, repaying their losses. However, around 30 shareholders of the community bank believed they had lost a combined total of $8.3 million. Their financial plans, including retirement savings, elder care funds, and educational savings for their children and grandchildren, were all jeopardized.
On Monday, shareholders rejoiced as federal Judge John W. Broomes announced, one by one, that they would be reimbursed in full. Fortunately for them, the FBI managed to recover the funds from a cryptocurrency account associated with Tether Ltd. in the Cayman Islands.
During a prior sentencing hearing, the victims had described Hanes as a “deceitful cheat and a liar,” branding his actions as “pure evil.”
Margaret Grice attended the recent court session hoping to reclaim only $1,000, but was astounded to find out that she would receive nearly $250,000—amounting to her entire 401(k). “I’m just really thrilled,” she stated. “I can breathe.”
Prosecutors indicated that Hanes fell victim to a scam referred to colloquially as “pig butchering,” wherein a third-party fraudster builds trust with the victim and ultimately persuades them to invest their entire savings into cryptocurrency, which virtually disappears. Officials from both the U.S. and U.N. have reported a rise in these scams, predominantly carried out by criminals based in Southeast Asia who exploit American citizens.
According to court documents, Hanes began investing what he believed was $5,000 in cryptocurrency in late 2022 after engaging with a contact via WhatsApp. Soon after, he began diverting funds from his church and investment club, with court records revealing an alarming increase in the scam’s progression during the summer of 2023. Over eight weeks, Hanes transferred $47.1 million out of customer accounts in 11 separate wire transactions. He was under the false impression that each transfer was essential to retrieve his investment, while simultaneously monitoring a fictitious website displaying his supposed gains of over $200 million.
Hanes’ attorney, John Stang, emphasized that Hanes initially intended for part of the funds to return to the bank, but this was all an elaborate ruse. “Now it’s fiction, it didn’t exist. We all know that now… It failed big time,” Stang explained.
Hanes did not attend the recent court session, but during an earlier hearing, he expressed remorse. “From the deepest depth of my soul, I had no intention of ever causing the harm that I did,” he remarked. “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.”
While acknowledging his circumstances as a victim of a scam, prosecutors argued that Hanes overstepped his bounds by unlawfully seizing customer funds and breaching banking regulations, leading to his guilty plea for embezzlement as a bank officer back in May.
Having held a prominent position in his small hometown of 2,000 residents, Hanes found it easier to perpetrate these actions; he had been involved with the local school board, volunteered at swim meets, and had memberships with the Kansas Bankers Association. Moreover, his role extended beyond his town as he advocated for local banks at the national level, even speaking in front of Congressional committees about their significance in rural farming communities.
On Monday, prosecutors indicated that the Federal Deposit Insurance Corporation intended to recover its disbursed insurance claims to bank customers. However, Judge Broomes asserted that the financial hardships faced by the shareholders, who became insolvent due to the fraudulent scheme, warranted prioritizing their reimbursements before any recovery efforts for the FDIC.
Now 53, Hanes may still be in his late 70s upon eventual release and is unlikely to fulfill the restitution of the $47.1 million owed to the FDIC. In a court document, Hanes and his legal counsel attempted to justify his actions, stating, “Mr. Hanes made some very bad choices after being caught up in an extremely well-run cryptocurrency scam. He was the pig that was butchered.”