Ex-Bank CEO Sentenced to Over 24 Years for $47 Million Cryptocurrency Fraud
Shan Hanes, former CEO of a bank, has been sentenced to more than 24 years in federal prison after embezzling $47 million in a cryptocurrency fraud scheme. Shan Hanes, the former CEO of Heartland Tri-State Bank, was reportedly ensnared in a “pig butchering” scam, where he was deceived into purchasing cryptocurrency to unlock supposed returns on investments that never materialized.
Shan Hanes, 53, orchestrated a series of wire transfers over eight weeks last year, leading to the collapse of Heartland Tri-State Bank in Elkhart, Kansas. The bank’s failure was one of only five in the United States in 2023 and resulted in its takeover by the Federal Deposit Insurance Corporation (FDIC).
The rise of pig butchering scams
Pig butchering scams have become increasingly prevalent in recent years. Scammers typically initiate contact with victims through messaging apps, dating platforms, or social media, gradually building a relationship before persuading them to invest in cryptocurrency schemes.
Between May and June 2023, Shan Hanes executed a series of wire transfers using the bank’s funds. He also embezzled money from a local church, an investment club, and even his daughter’s college savings account. The scammers manipulated Hanes into purchasing cryptocurrency, promising returns that never came to fruition. Instead, Hanes lost all the money he stole in the scam.
Sentencing and reaction
Last week, U.S. District Judge John Broomes sentenced Shan Hanes to 24 years in prison, which was 29 months longer than what prosecutors had requested. Hanes had pleaded guilty in May to a single count of embezzlement by a bank officer.
“Hanes’ greed knew no bounds,” said U.S. Attorney Kate E. Brubacher in a statement. “He betrayed not only his professional obligations and personal relationships but also federal law. His illegal schemes jeopardized confidence in financial institutions,” she added.
Brian Mitchell, Hanes’ longtime next-door neighbor, described the ex-CEO’s actions as “pure evil” during the sentencing, noting that Hanes showed little remorse for his actions.
How the fraud unfolded
According to reports, Shan Hanes began stealing after being targeted in the pig-butchering scheme in late 2022. Communicating with the scammers via WhatsApp, he initially used personal funds to buy cryptocurrency. By early 2023, however, Hanes had stolen $40,000 from the Elkhart Church of Christ, $10,000 from the Santa Fe Investment Club, $60,000 from his daughter’s college fund, and nearly $1 million in stock from the Elkhart Financial Corporation.
In May 2023, Hanes began making wire transfers from Heartland Tri-State Bank to accounts controlled by the scammers. The bank ultimately collapsed, leading to Hanes’ firing and the FDIC takeover. He was charged in February and placed under house arrest until his sentencing last week.