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Ex-bank CEO gets 24 years after falling for crypto scam, causing bank collapse (arstechnica.com)

submitted 2 months ago by [email protected] to c/[email protected]

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[–] [email protected] 35 points 2 months ago* (last edited 2 months ago) (1 children)

Given that he was embezzling bank funds to funnel into a fake crypto scam, and the people who those funds belonged to were not in fact the bank, and the article suggests those people were not made whole, I'm just gonna say that it's not about the bank, it's about the people who lost shit like their life savings to this a-hole.

[–] [email protected] 9 points 2 months ago (3 children)

Because the bank was insured by the Federal Deposit Insurance Corporation (FDIC), the FDIC "absorbed the $47.1 million loss" after "Hanes’ fraudulent actions caused HTSB to fail and the bank investors to lose $9 million," the US Attorney's Office said.

It sounds like no customer with the bank lost anything. Only investors who I assume are well off anyways.

[–] [email protected] 6 points 2 months ago* (last edited 2 months ago) (1 children)

The banks customers were not the only people who he stole from. However, I concede the point.

[–] [email protected] 3 points 2 months ago* (last edited 2 months ago)

Oh yeah. That's fair.

I guess the silver lining here was that it could have been so much worse but thank goodness for FDIC.

[–] [email protected] 3 points 2 months ago (1 children)

That's still 47 million of everyone's money that could have been better spent

[–] [email protected] 3 points 2 months ago

Yeah, that's 47 million in tax payer dollars. So instead of stealing millions from a few people, it's pennies from millions of people. Definitely a lot of better things that money could have gone to.

[–] [email protected] 2 points 2 months ago* (last edited 2 months ago) (2 children)

Plenty of people lost most of their retirement savings - FDIC only goes up to 250k which isn't enough for super frugal FIRE. And definitely not enough when you get old and medical bills are crazy high in Murica.

[–] [email protected] 2 points 2 months ago* (last edited 2 months ago) (1 children)

Ok so I decided to read into this a little more. On FDICs website it says all customer funds should be available backing up my assumption that no customer of the bank lost any money: https://www.fdic.gov/resources/resolutions/bank-failures/failed-bank-list/heartlandtristate.html

It says:

The full balance of all deposit accounts has been transferred to Dream First Bank, N.A.

[–] [email protected] 3 points 2 months ago

That contradicts statements on https://arstechnica.com/tech-policy/2024/08/ex-bank-ceo-gets-24-years-after-falling-for-crypto-scam-causing-bank-collapse/

Victims may never fully recover losses, DOJ says

In the community, people are still struggling to recover, Mitchell told NBC News, noting that some people lost up to 80 percent of their retirement savings. For at least one woman, retirement is impossible now, Mitchell said, and for another local woman, it has become difficult to pay for her 93-year-old mother's nursing home.

US Attorney Kate E. Brubacher said that it's hard to say when or if victims will be made whole again.

But it seems like they didn't let it fail completely and transferred all assets and most liabilities to Dream First Bank? That would be nice for the granny with more than 250K in the account.

[–] [email protected] 1 points 2 months ago

Actually 250k is the minimum for FDIC. Also I'm only basing my information on this single article but it says he stole 47 million and then the article goes on to say that FDIC absorbed the 47 million loss. Given this wording it sounds like every single dollar was covered.