WICHITA, KANSAS (AP) — Sobs of relief broke out in a federal courtroom in Kansas on Monday as dozens of people whose life savings were embezzled by a bank CEO learned that federal law enforcement had gotten their money back.

“I can’t explain the burden that’s been lifted off of us,” said 70-year-old Bart Camilli, who just learned that he and his wife, Cleo, will earn close to $450,000. This was the money Bart started saving at the age of 18 when he received his first private pension. bill. “It’s life changing.”

In August, former Kansas bank CEO Shan Hanes was sentenced to 24 years in prison for stealing $47 million from customer accounts and transferring the money to cryptocurrency accounts run by fraudsters. Hanes also stole $40,000 from his church, $10,000 from an investment club and $60,000 from his daughter’s college fund, losing $1.1 million of his own in the scheme, prosecutors said. Prosecutor Aaron Smith said the deposits were “thrown in the air”.

Hanes’ Heartland Tri-State Bank, running out of cash, was closed by federal regulators and sold to another financial institution. Customers’ $47.1 million in savings and checking accounts were insured by the Federal Deposit Insurance Corp., which covered their losses.

But the community-owned rural bank Hanes helped found still had 30 shareholders — including close family friends and neighbors — who thought they had lost $8.3 million in investments: well-planned retirements upended, long-term elder care funds gone, education for children and the funds and inheritances allocated to the grandchildren were reduced to zero.

On Monday, shareholders rose to their feet to cheer after federal Judge John W. Broomes in Wichita told them, one by one, that the full payment would be restored. The FBI transferred the money to Tether Ltd. in the Cayman Islands. He recovered it from a cryptocurrency account held by.

At an earlier sentencing hearing, those victims had called Hanes a “cheater and a liar” and “pure evil.”

Margaret Grice came to court Monday thinking she would get her $1,000 back. Instead, he learned he would make back his entire 401(k), nearly $250,000.

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

Prosecutors said Hanes, the CEO of Heartland Tri-State Bank in Elkhart, Kansas, lost the money in a scam called “hog butchering,” or the fattening of pigs before slaughter. In the scam, a third party gains the trust of the victim and over time convinces them to invest all their money in cryptocurrency, which instantly disappears. US and UN officials say these plans They are proliferating, with scammers largely based in Southeast Asia increasingly taking advantage of Americans.

In late 2022, Hanes began buying what he thought was $5,000 worth of cryptocurrency and contacted someone via WhatsApp, according to court records. A few months later, he transferred his church and investment club funds. Records show the fraud accelerated in the summer of 2023, when Hanes transferred $47.1 million from customer accounts in 11 wire transfers in just eight weeks. He thought each transfer was necessary to terminate the investment and provide a cash outflow, according to court records. He watched the money grow to over $200 million on a fake website.

“He was going to get some of the money and the rest of the money was supposed to go back to the bank,” said his attorney, John Stang. “It was no longer a fiction. We all know this now… It was a huge failure.”

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

“From the bottom of my soul, I had no intention of causing the harm that I did,” he said. “I will forever struggle to understand how I was deceived and how simply getting the money back made the situation worse.”

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

His prominent position in his hometown of 2,000 made it easier for him to get away with it. Federal Reserve System research to create; He had been on the school board, volunteered at a swim meet and served on the Kansas Bankers Association.

He was also a banking leader beyond his rural community. In recent years, he has testified to Congressional committees about the importance of community banks in farming communities and served as a director of the American Bankers Association, which represents nearly all banking entities in the United States.

On Monday, prosecutors said the FDIC is seeking repayment of insurance claims it reimbursed to bank customers. But Judge Broomes said the economic circumstances of shareholders who were “insolvent because of the fraudulent scheme” justified reimbursing them before the FDIC could fix anything.

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

In the court filing, Hanes and his attorney attempted to explain what happened.

“Mr. “Hanes made very poor choices after being caught up in an extremely well-orchestrated cryptocurrency scam,” they said. “He was the pig that was butchered.”