Former CEO of Kansas Bank sentenced to 24 years in prison for $47 million crypto fraud

The former CEO of a Kansas-based bank has been sentenced to over 24 years in prison after crippling the bank with a $47 million crypto fraud.

Shan Hanes, the former CEO of the now-defunct Heartland Tri-State Bank, was sentenced to 293 months in prison after the court found that he embezzled millions of dollars and caused the collapse of his bank.

In a press release dated 19 August releaseThe U.S. Attorney in Kansas said Hanes, who pleaded guilty to the crime, orchestrated a hog slaughter scheme in which he made over a dozen electronic transfers totaling over $47 million from Heartland Tri-State Bank to a crypto wallet between May and July 2023.

The US Attorney in charge of the case complained about Hanes' unprofessional conduct and claimed that his actions had abused the trust of his customers.

“Hanes' greed knew no bounds. He violated his professional duties, his personal relationships, and federal law. Shan Hanes not only betrayed Heartland Bank and its investors, but his illegal dealings also threatened trust in financial institutions.”

Today's verdict is an act of justice for the victims and a sign that the U.S. Department of Justice will hold accountable those who abuse positions of trust for their own benefit.“, said U.S. Attorney Kate E. Brubacher.

The special agent in charge of the FBI's Kansas City field office responded to the court ruling by stressing that Hanes' illegal activities were his idea to get rich quick and ultimately led to the collapse of his bank.

“As CEO of Heartland Tri-State Bank, Mr. Hanes enjoyed the trust of the community of Elkhart, Kansas, but he abused that trust. He sought to enrich himself financially by embezzling the bank's funds. His get-rich-quick scheme was actually a pig slaughtering scheme. His involvement in that scheme ultimately led to the bank's collapse. His job, the bank's job, was to protect its customers and identify fraudulent schemes – not to participate in them.” said Special Agent in Charge Stephen Cyrus of the FBI's Kansas City field office.

Heartland Tri-State Bank, which was insured by the Federal Deposit Insurance Corporation, bore the $47.1 million loss resulting from Hanes' pork slaughter fraud.

The illegal activities led to the collapse of the bank and also cost its investors $9 million.

What you should know

A pork slaughter scam, also known as “Sha Zhu Pan” or “Shazhupan,” which translates to “killing pork plate,” is a type of long-term fraud and investment scam in which the victim is gradually tricked into making increasingly large contributions, usually in the form of cryptocurrency, to a fraudulent cryptocurrency scheme.