By Martha Mendoza, The Associated Press

WICHITA, KANSAS — Screams of relief erupted in a federal courtroom in Kansas Monday as dozens of people whose life savings were embezzled by a bank CEO learned that federal law enforcement had recovered the money.

“I can’t describe the weight lifted off us,” said Bart Camilli, 70, who and his wife Cleo had just learned they’d get back nearly $450,000 — money Bart started saving at age 18 when bought his first individual pension. account. “It’s life changing.”

In August, former Kansas bank CEO Shan Hanes was sentenced to 24 years after stealing $47 million from customer accounts and transferring the money to cryptocurrency accounts run by scammers. Prosecutors said Hanes also stole $40,000 from his church, $10,000 from an investment club and $60,000 from his daughter’s college fund, and lost $1.1 million from his own to scheme. The depositions were “thrown into the ether,” said prosecutor Aaron Smith.

Hanes’ cash-strapped Heartland Tri-State Bank was shut down by federal regulators and sold to another financial institution. $47.1 million of customers’ checking and savings accounts were insured by the Federal Deposit Insurance Corp., which paid their losses.

But there were still 30 shareholders of the rural, community-owned bank that Hanes helped found — including his close family friends and neighbors — who believed they had lost $8.3 million in investments: well-planned pensions have been changed, long-term care funds for the elderly have disappeared, education. funds and legacies for children and grandchildren eliminated.

On Monday, shareholders applauded Federal Judge John W. Broomes of Wichita after he told them, one by one, that they would be fully reimbursed. The FBI recovered funds from a cryptocurrency account held by Tether Ltd. in the Cayman Islands.

During an earlier sentencing hearing, those victims called Hanes a “fraud and liar” and “pure evil.”

Margaret Grice came to court Monday thinking she was going to get $1,000 back. Instead, she learned she’d get nearly $250,000 back, her entire 401(k).

“I’m really excited,” she said. “I can breathe.”

Prosecutors said Hanes, who was the CEO of Heartland Tri-State Bank in Elkhart, Kansas, lost the money in a scam called “hog butchering,” or the way pigs are fattened before slaughter. In the scam, a third party gains the trust of a victim and over time convinces them to invest all their money in cryptocurrency, which immediately disappears. US and UN officials say these schemes proliferate, scammers, mostly from Southeast Asia, increasingly taking advantage of Americans.

Hanes began buying what he believed to be $5,000 in cryptocurrency in late 2022 by communicating with someone he contacted on WhatsApp, according to court records. A few months later, he transferred the church and investment club funds. Records show the scam accelerated in the summer of 2023, when Hanes transferred $47.1 million from customer accounts in 11 wire transfers in just eight weeks. Each transfer, he believed, was necessary to end the investment and cash out, according to court filings. He watched, on a fake website, as the money appeared to grow to more than $200 million.

“He was supposed to take part of the money and the rest of the money was supposed to go back to the bank,” explained his lawyer John Stang. “Now it’s fiction, it didn’t exist. We all know now… It failed miserably.”

Hanes, who was not in court Monday, apologized at an earlier sentencing hearing.

“From the bottom of my heart, I had no intention of ever causing the harm that I did,” he said. “I will always struggle to understand how I was duped and thinking we were just getting our money back made it worse.”

Prosecutors said Hanes wasn’t just the victim of a scam, he overstepped his bounds when he began taking customers’ money and violating banking regulations. He pleaded guilty to embezzlement by a bank officer in May.

His prominent position in his home town of 2,000 made it easier for him to escape, to Investigation of the Federal Reserve System found; he had been on the school board, volunteered as a swim official and worked at the Kansas Bankers Association.

He was also a banking leader beyond his rural community. In recent years, he has testified before congressional committees about the importance of local banks in agricultural communities and served as a director for the American Bankers Association, which represents nearly all U.S. banking assets.

On Monday, prosecutors said the FDIC wanted to be reimbursed for insurance claims it reimbursed to the bank’s customers. But Judge Broomes said the economic circumstances of shareholders “who became insolvent as a result of a fraudulent scheme” justified paying them back first before the FDIC could recover anything.

Hanes, 53, could be in his 70s when he is released and is unlikely to be able to pay the $47.1 million still owed to the FDIC.

In a court filing, Hanes and his attorney tried to explain what happened.

“Mr. Hanes made some very poor choices after getting caught up in an extremely well-run cryptocurrency scam,” they said. “He was the pig that got slaughtered.”