CEO’s ‘greed with no bounds’ costs him 24 years of freedom

A Kansas CEO transferred millions of dollars to cryptocurrency scammers in a pig butchering scheme, which caused the bank to shut down and investors to lose millions.

Shan Hanes, 53, of Elkhart, Kansas, pleaded guilty to one count of embezzlement by a bank officer.

Hanes was the Chief Executive Officer of Heartland Tri-State Bank, otherwise known as HTSB.

While working for the bank, Hanes completed 11 separate wire transactions between May and June 2023. These transactions amounted to $47.1 million of the bank’s funds to a cryptocurrency wallet in what is known as a pig butchering scheme.

Pig butchering is a long-term scheme in which the victim (or pig) is tricked into “investing” in a fraudulent project, usually involving cryptocurrency. The “butchering” occurs when all of the victim's funds have been obtained.

At the time, HTSB was insured by the Federal Deposit Insurance Corporation (FDIC) and the insurer covered the $47 million.

However, the huge loss caused the bank to close which lost investors almost $10 million.

According to the Office of Inspector General (OIG), a division of a federal or state agency that aims to oversee operations and prevent unlawful activity, HTSB had $135 million in assets before it closed.

The OIG also said that, under the CEO’s control, employees at the HTSB circumvented internal controls to process these unlawful transactions. These transfers crippled the organization, its capital and liquidity, causing the bank to collapse.

“Hanes’s greed knew no bounds,” said US Attorney Kate E. Brubacher. “He trespassed on his professional obligations, his personal relationships, and federal law. Not only did Shan Hanes betray Heartland Bank and its investors, but his illegal schemes also jeopardized confidence in financial institutions.”