Shan Hanes, the former CEO of the now-defunct Heartland Tri-State Bank in Kansas, has been sentenced to 24 years in prison after pleading guilty to embezzling tens of millions of dollars in a fraudulent cryptocurrency scheme. Hanes’ actions not only led to the bank’s collapse but also resulted in the complete loss of equity for its investors.
The U.S. Attorney’s Office for the District of Kansas announced the sentencing, detailing how Hanes exploited his position to orchestrate the fraud. According to court documents, Hanes engaged in a scheme known as “pig butchering,” executing 11 wire transfers from the bank’s funds between May and July 2023. These transfers, totaling $47.1 million, were directed to various cryptocurrency wallets controlled by unidentified third parties.
Hanes’ fraudulent activities caused a significant financial loss of $9 million for investors and directly contributed to the insolvency and eventual failure of Heartland Tri-State Bank.
The fraud began in January 2023 when Hanes first diverted $30,000 from the Elkhart Church of Christ. He later continued to siphon funds from the church and the Santa Fe Investment Club. His ability to bypass internal controls allowed him to process the wire transfers that ultimately crippled the bank.
U.S. Attorney Kate E. Brubacher described Hanes as a “liar and a master manipulator,” condemning his betrayal of Heartland Bank and its investors and highlighting the broader impact on public trust in financial institutions.
No supporters testified on Hanes’ behalf during the sentencing, reflecting the community’s disapproval of his actions. Brubacher acknowledged that while many victims may never fully recover their losses, the lengthy prison sentence represents a measure of justice.
FBI Special Agent in Charge Stephen Cyrus of the Kansas City Field Office stated that Hanes’ greed led to the bank’s collapse, adding, “His idea to get rich quick… was a pig butchering scheme.”
“Pig butchering” scams involve fraudsters building trust with victims by promising high returns on investments, only to ultimately defraud them. According to INTERPOL’s Global Financial Fraud assessment, such schemes have been increasing, with investment scam losses reaching a new high of 38% last year. Estimates suggest that pig butchering scams have netted approximately $75 billion globally since 2020.
