Nikolas Sargeant
Shan Hanes, the former chief executive of the now-defunct Heartland Tri-State Bank in Kansas, has been sentenced to 293 months (approximately 24 years and 5 months) in prison for his role in a massive cryptocurrency fraud scheme. The U.S. Attorney's Office in Kansas announced on August 19 that Hanes had pleaded guilty to one count of embezzlement by a bank officer.
According to the press release, Hanes orchestrated over a dozen wire transfers totaling more than $47 million from Heartland Tri-State Bank to a cryptocurrency wallet between May and July 2023. This scheme, known as "pig butchering," led to the bank's failure and resulted in significant financial losses.
The Federal Deposit Insurance Corporation (FDIC), which insured the bank during the period of Hanes' fraudulent activities, absorbed the $47.1 million loss. Additionally, the bank's investors suffered a $9 million loss due to the collapse.
U.S. Attorney Kate E. Brubacher emphasized the severity of Hanes' actions, stating that he "trespassed his professional obligations." She added that the sentence serves as both a "measure of justice for the victims" and a clear message that the U.S. Department of Justice will hold accountable those who abuse positions of trust for personal gain.
This case underscores the potential risks within the cryptocurrency sector, where the pseudonymous nature of blockchain networks can attract individuals seeking quick and potentially illicit profits.
It follows another high-profile case involving Reginald Fowler, a former Minnesota Vikings co-owner, who was sentenced to six years in prison for operating a "shadow bank" within the crypto industry, involving over $700 million in unregulated transactions in 2018.
