Kelvin Daminabo
Shan Hanes, the ex-CEO of Heartland Tri-State Bank, has been handed a 293-month prison term for masterminding a $47 million cryptocurrency fraud that resulted in the bank’s downfall. The sentence, disclosed on August 19, signifies a significant stride in combatting financial offenses.
The US Attorney’s office in Kansas revealed that Hanes admitted to siphoning off millions of dollars through a deceptive “pig butchering” ploy. This strategy comprised more than a dozen wire transfers exceeding $47 million from the bank to a cryptocurrency wallet between May and July 2023. The term “pig butchering” alludes to the tactic of enticing individuals to invest in deceitful cryptocurrency ventures.
US Attorney Kate E. Brubacher criticized Hanes’ conduct, declaring, “Hanes’ avarice was limitless. He violated his professional duties, personal connections, and federal regulations. Not only did Shan Hanes deceive Heartland Bank and its stakeholders, but his illicit maneuvers also endangered faith in financial establishments.” Brubacher stressed that the sentencing delivers justice for the victims and issues a caution to those leveraging their entrusted positions for personal benefit.
Special Agent in Charge Stephen Cyrus of the FBI Kansas City Field Office echoed Brubacher’s viewpoint, stating, “As the CEO of Heartland Tri-State Bank, Mr. Hanes held the community of Elkhart, KS’s trust and confidence, which he breached. He endeavored to profit illicitly by misappropriating bank funds. His quest for rapid wealth, in essence, amounted to a pig butchering ruse. His involvement in this ploy ultimately led to the bank’s collapse.”
The downfall of Heartland Tri-State Bank incurred substantial financial setbacks, with the Federal Deposit Insurance Corporation absorbing the $47.1 million loss triggered by Hanes’ scheme. Investors also faced a $9 million setback. The sentencing underscores the repercussions of financial offenses and underscores the significance of holding accountable those in positions of trust for their behaviors.