The ex-CEO of Heartland Tri-State Bank in Kansas has been indicted for allegedly diverting $47.1 million from the bank’s reserves into cryptocurrency investments. 

The Elkhart, Kansas-based institution’s CEO, Shane Hanes, also appeared before Congress several times to discuss the importance of community banks. 

According to federal court documents, Hanes is accused of massive financial misappropriation from the bank and embezzling funds from a local church. The case’s filings also revealed that a local businessman, Brian Mitchell, was also approached by Hanes for a loan. The former CEO mentioned that the loan was to help him withdraw funds from a crypto investment. 

Bloomberg reports suggested Hanes had invested customer funds from the bank and the church since 2022. Ultimately, the bank incurred the major monetary loss, forcing it to close down. However, the involvement of the Federal Deposit Insurance Corporation (FDIC) helped the bank return customer funds, but its operation couldn’t continue. 

Although such scams have been common in the last few years, with Sam Bankman-Fried’s FTX saga still fresh on the minds of crypto enthusiasts, the incident was outside of the norm, given it happened in a town of just 1,800 residents.