- The former CEO of Kansas Heartland Tri-State Bank has been sentenced to 24 years in prison for embezzling $47 million in crypto
- Shan Hanes fell for a WhatsApp crypto scam and sent the scammers customer funds, leading to its collapse
- The case has highlighted the growing prevalence and severe impact of pig butchering scams
The former CEO of the Kansas Heartland Tri-State Bank, who caused it to fold through the embezzlement of $47 million in crypto, has been sentenced to 24 years in prison. Shan Hanes’ actions led to the failure of the bank and a “complete loss of equity for investors,” according to the US Attorney’s Office for the District of Kansas, with the money used to pay off fraudsters after Hanes was caught up in a pig butchering scam. The case is another indicator of the growing prevalence of such scams and the impact they can have.
Hanes Sent $47.1 Million to Random WhatsApper
Hanes fell for the scam in mid-2023 after an unknown third party contacted him via WhatsApp, encouraging him to invest in cryptocurrency. Showing stultifying unawareness, Hanes initiated multiple wire transfers totaling $47.1 million from Heartland Tri-State Bank to Kraken, making a total of 11 transfers. These were often at the request of the scammer, who claimed they would “unfreeze” previously deposited funds with new payments.
Hanes misled bank employees, the board of directors, and investors about the wire transfers while distributing the funds to several cryptocurrency accounts controlled by the scammers. The US Attorney’s Office charged Hanes in February, and he entered a guilty plea on May 23.
In July 2023, the Kansas Office of the State Bank Commissioner declared Heartland Tri-State Bank insolvent but provided limited details at the time. This occurred shortly after the failures of Silicon Valley Bank and Signature Bank, though Kansas officials stated this incident did not reflect broader banking issues.
“Master Manipulator”
After his guilty plea last year, US Attorney Kate Brubacher did not mince her words:
Shan Hanes is a liar and a master manipulator who caused Heartland Tri-State Bank to collapse. Even as he was squandering away tens of millions of dollars in cryptocurrency, Hanes orchestrated schemes to cover his tracks concerning the losses at the bank.
While the Federal Deposit Insurance Corporation will cover much of the lost funds, some customers will never fully recoup losses to their life savings and retirement funds.
Authorities have warned for more than a year that pig butchering scams are on the rise, although the scammers probably couldn’t believe their luck that they managed to con a bank manager into handing over the keys to the vault.
