$47 Million Pig Butchering Scam: Bank CEO Shan Hanes Sentenced to 24 Years

Shan Hanes, the former CEO of a Kansas bank, was sentenced to 24 years in prison for orchestrating a cryptocurrency "pig butchering" scam that devastated the bank and defrauded investors. The scheme, which lured victims with the promise of high returns on cryptocurrency investments, ultimately led to significant financial losses and the collapse of the bank. Hanes' conviction highlights the severe consequences of such fraudulent activities in the rapidly evolving cryptocurrency space. Hanes, as the CEO of Heartland Tri-State Bank, held the trust and confidence of the community of Elkhart, KS, but he violated that trust," said special agent in charge Stephen Cyrus, of the FBI Kansas City field office, in a statement. "He attempted to benefit financially by embezzling funds from the bank."

Hanes instructed bank employees to execute wire transfers and "made many misrepresentations to various people" to access the funds for transfer, prosecutors wrote.

Brian Mitchell, Hanes’ longtime next-door neighbor advised "You're in a scam,". "I stopped him and asked, 'Is this bank money you're playing with?' And he replied, 'No, Brian.'" Hanes insisted he needed the $12 million to "activate" the funds he had already transferred to the crypto account, supposedly in Hong Kong, Mitchell recalled. "I told him, 'Get on a plane, go to Hong Kong, hire an interpreter, and get a bank check' for the funds supposedly held there," Mitchell said. "Then I said, 'I'm not going to loan you the money. You're in a scam, walk away.'" However, later that same day, after Mitchell rejected his pleas, Hanes had bank employees wire $8 million to the scammers' accounts, prosecutors stated in a court filing.

The 53-year-old former bank executive pleaded guilty to embezzling $47.1 million from HTSB through 11 wire transfers between May and July 2023, directing the funds to cryptocurrency wallets involved in a scam known as “pig butchering.” This type of scheme typically involves fraudsters convincing victims to invest in fake cryptocurrency opportunities, only to steal the money.

Shan Hanes, the former CEO of a Kansas bank, was sentenced to 24 years for running a "pig butchering" cryptocurrency scam. This fraudulent scheme promised high returns, leading to significant financial losses and the bank's collapse. This case serves as a stark warning about the severe legal consequences of cryptocurrency fraud.

If you want to learn more about investment scams, check out our list of similar scams to this one here

• Defendant: Shan Hanes, ex-CEO of Heartland Tri-State Bank.
• Crime: Fraudulent cryptocurrency investment solicitation ("Pig Butchering" scam).
• Amount Defrauded: USD $47 Million.
• Method: Promised high returns on cryptocurrency investments; transferred funds to scammers' crypto accounts; embezzled additional funds.
• Sentence: 24 years in federal prison.
• Additional Penalties: Not specified.
• Investigating Agencies: FBI and the U.S. Attorney's Office.
• Plea: Guilty to charges related to the fraud and embezzlement.
• Prosecutor's Statement: Emphasized the breach of professional duties and the significant impact on both the bank and its investors.

Shan Hanes, while serving as the CEO of Heartland Tri-State Bank, began a fraudulent operation known as a "pig butchering" scam. This type of scam involves gaining the trust of potential victims and persuading them to invest in non-existent cryptocurrency opportunities. From May to June 2023, Hanes used wire transfers to steal funds directly from the bank, channeling the money into accounts controlled by scammers. Over time, he embezzled a local church, an investment club, and his college savings account. The scam unraveled as the financial discrepancies grew, leading to the bank's collapse and Hanes' subsequent arrest and conviction. The trial concluded with Hanes receiving a 24-year prison sentence.

Shan Hanes, 53, of Elkhart, was sentenced Monday by U.S. District Judge John Broomes to 293 months in prison. He had previously pleaded guilty in U.S. District Court to one count of embezzlement by a bank officer.

Shan Hanes, the former CEO of Heartland Tri-State Bank, has been sentenced to 24 years in federal prison for his involvement in a "pig butchering" cryptocurrency scam. The scheme defrauded investors out of $47 million, leading to the bank's collapse. Hanes manipulated victims into investing in fraudulent cryptocurrency opportunities, misappropriated funds for personal use, and paid off earlier investors in a Ponzi-like arrangement. The FBI and the U.S. Attorney's Office conducted the investigation, resulting in Hanes' conviction on multiple charges, including fraud and embezzlement. This case highlights the severe legal repercussions of financial fraud and the impact of such scams on investor trust and financial institutions.