Kansas Banker Sentenced to Prison for Defrauding Bank, Insurance Company

Prosecutors say a former Kansas banker has been sentenced to prison eight months in prison for a wire fraud scheme that included the theft of funds from Labette Bank and its insurance company subsidiary, as well as filing false tax returns.

The U.S. attorney’s office said in a news release that 61-year-old Keith L. Shaffer of Altamont will also have to serve four months of home confinement after he completes his prison term.

Jurors convicted Shaffer in November on charges of misapplication of bank funds, wire fraud, misappropriation of insurance funds and making false statements on a federal tax return.

As manager of a bank subsidiary called Labette Insurance Co., Shaffer was a salaried employee of the bank. All commissions paid on sales by Labette Insurance belonged to the bank, but Shaffer diverted more than $134,000 in commissions on sales of insurance into his personal account, according to the U.S. Attorney’s office. As part of the scheme, Shaffer submitted false information to the bank and to the Internal Revenue Service.