Kansas Bank CEO Shan Hanes Arrested in “Pig Butchering” Crypto Scam, Raising Concerns about Investment Fraud Victims
The arrest of Shan Hanes, former CEO of the Heartland Tri-State Bank in Elkhart, Kansas, for allegedly embezzling $50 million to participate in a “Pig Butchering” cryptocurrency scam has sent shockwaves through the state’s banking system and highlighted the growing threat of investment fraud.
Hanes is accused of intentionally defrauding the bank by willfully misapplying and embezzling approximately $47.1 million. He allegedly did this by initiating a series of wire transfers between May 2023 and July 2023 to purchase cryptocurrency for his personal benefit.
Kansas State Bank Commissioner David Herndon expressed surprise and disappointment at the incident, stating:
“I was surprised. I was shocked. I was disappointed. All of those feelings. How could this happen? Why did it happen?”
“Pig Butchering” schemes involve scammers building relationships with victims, gaining their trust, and ultimately convincing them to invest in fake or manipulated cryptocurrencies, leading to significant financial losses.
According to Commissioner Herndon:
“A cryptocurrency scheme that the FBI is now referring to as ‘Pig Butchering'” “…It’s not just Kansas that’s seeing this problem. According to the FBI, it’s increasing investment fraud. From ’21 to ’22, it increased 183%. And it’s now into the billions of dollars that’s, that’s being stolen.”
Court documents allege Hanes stole the embezzled funds from a local church and an investment club.
While this case is extreme, Commissioner Herndon warns of the rising prevalence of crypto scams and urges individuals and businesses to remain vigilant.
“Nobody is immune, whether it’s an individual or business, or a municipality. So pay attention. Don’t click on unknown links or reply to emails that you’re not familiar with or not aware of. And if you do find or feel that you’re a victim, call law enforcement.”
- The Heartland Tri-State Bank shut down in August 2023 following the alleged embezzlement.
- Hanes faces up to 30 years in prison and a $1 million fine if convicted.
- This incident emphasizes the importance of investor education and awareness regarding crypto scams and other forms of investment fraud.
According to the United States Attorney’s Office
Former Kansas bank executive charged with embezzling $47 million
The U.S. Attorney’s Office – District of Kansas has charged a Kansas man by information with embezzling millions of dollars from his former employer. An information is an accusation exhibited against a person for a criminal offense without an indictment from a grand jury.
According to court documents, Shan Hanes, 52, of Elkhart is charged with one count of bank embezzlement.
Hanes previously served as the chief executive officer of Heartland Tri-State based in Elkhart. Hanes is accused of intentionally defrauding the bank by willfully misapplying and embezzling approximately $47.1 million. He allegedly did this by initiating a series of wire transfers between May 2023 and July 2023 to purchase cryptocurrency for his personal benefit.
The defendant is scheduled for his initial court appearance February 28, 2024, before U.S. Magistrate Judge Gwynne E. Birzer of the U.S. District Court for the District of Kansas.
If convicted, Hanes faces a maximum penalty 30 years in prison.
The Federal Bureau of Investigation (FBI), Federal Deposit Insurance Corporation – Office of Inspector General (FDIC-OIG), Federal Reserve Board – Office of Inspector General (FRB-OIG), and Federal Housing Finance Agency – Office of Inspector General ((FHFA-OIG) are investigating the case.
Assistant U.S. Attorney Aaron Smith is prosecuting the case.