Elkhart victims say forgiveness will be hard 

The ‘level of deceit’ by a local banker has shocked locals to their core. Many lost their life savings in the $47 million embezzlement scheme

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August 26, 2024 - 1:57 PM

Elkhart banker Shan Hayes holds a marker board while his mug shot is taken earlier this year. (Morton County Jail)

The victims fill the left third of the gallery, on the side of the courtroom behind the prosecutor. They were shareholders in the bank, individuals whose investments ranged from the modest to the substantial, but whose assets in the failed institution are now exactly the same amount of dollars — zero.

It is the closest any of the victims have been to Hanes since the bank failure of July 28, 2023. That’s when the state banking commissioner declared the Heartland Tri-State Bank of Elkhart insolvent, the FDIC assumed control, and the bank sold to a competitor.

In an eight-week period ending July 7 of last year, Hanes — the Heartland CEO — embezzled $47 million to cover his losses in a complicated cryptocurrency scheme. He did this in a series of 10 wire transfers, according to court documents, each transfer ranging in the millions, to Payward Ventures, a largely unregulated crypto exchange better known as Kraken.

The case may be the most notorious example of white collar crime in Kansas history, bigger even than the Great Kansas Bond Scandal of 1933. In that scheme, more than $1 million in municipal bonds were forged.

By the time the Heartland bank failed, Hanes had already burned through his youngest daughter’s college fund and stolen $10,000 from his friends in a local investment club and $40,000 from his church where he sometimes preached the love of Jesus. The numbers are clear enough, but the reasons why Hanes broke bad and stole so much so fast may never be fully understood. The easy answer is greed, but ever since news of the bank failure broke last year, there have been few details about exactly who Hanes thought was on the other side of his cellphone.

Regulators said it was the kind of scam known as “pig butchering.”

Typically run by organized criminal gangs in southeast Asia, the scammers use modern technology to run one of the world’s oldest grifts — the lure of easy money. While the FDIC protected the bank’s depositors, it did not cover the $13 million lost by the shareholders or the retirement accounts of its employees.


Thirty years of working in adjacent offices did not prepare me for the level of deceit.Elkhart bank officer Moe Houtz

“My creator says I have to forgive,” says Marla Harris, a Heartland investor. “I’m not ready to forgive you, Shan, but I have to. You put me in the place of having to deal with my God for something I didn’t do.”

Elkhart is in the extreme southwestern corner of Kansas, just above the Oklahoma panhandle, and 270 miles away from the Wichita courtroom. The main street in Elkhart still resembles that of the famous Dust Bowl photographs taken in the 1930s. It’s a town of just under 2,000, and people’s lives are entwined in ways common to rural communities. The victim statements are elliptical in that most reference the defendant and others as friends, neighbors, co-workers. Their parents knew each other’s parents. Their children played together.

Everyone knew Hanes, whose first name is pronounced “Shane,” formerly regarded as smart and influential and honest, the kind of guy who personally cut the grass at Heartland bank. It was the sort of thing that endeared him to the community, although now it seems that it might all have been part of a carefully calculated act. That disconnect from who Elkhart thought Hanes was to the criminal he turned out to be runs through the victim’s stories like a refrain.

“I’d just like to know why (Shan) would do this,” says Dan Smith, a former vice president of Heartland Bank, a director and an associate of Hanes for 30 years. “For whatever reason, you burned it to the ground.”

There is no question of guilt before the court.


The only thing we’re guilty of is that we trusted that man too much.Pat Overpeck, a Heartland investor

Hanes already entered a guilty plea, on May 23, to a single count of embezzlement by a bank officer, an offense punishable by up to 30 years in prison. In exchange, federal prosecutors agreed to file no additional charges and allow Hanes to request a lighter sentence. He did this, through his attorney, requesting a “downward variance” from the advisory sentencing guidelines, based on the severity of the crime and other factors, that call for him to serve at least 235 months.

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