Ex-Kansas banker charged in crypto embezzlement

By Zunain Balouch - Crypto Content Writer
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Created by Taqi Khan from BTCRead

Shan Hanes, the former CEO of Kansas’s now-closed Heartland Tri-State Bank, has been charged with participating in a fraudulent crypto scheme. Hanes, from Elkhart, has admitted guilt to embezzling tens of millions of dollars in cryptocurrency.

According to the announcement, the fraudulent scheme caused the bank’s collapse, resulting in a total loss of equity for investors. The U.S. Attorney’s Office for the District of Kansas has sentenced Hanes to 24 years in prison for using his former position to carry out the fraud.

The crypto scheme is called “pig butchering.” It involved Hanes making 11 outgoing wire transfers of Heartland’s funds between May and July 2023, amounting to $47.1 million. Unknown third parties controlled various crypto wallets that received the funds.

Justice served in Heartland Bank fraud case

U.S. Attorney Kate E. Brubacher described the sentence as a step toward justice for the victims. She also highlighted that this decision shows the U.S. Department of Justice’s commitment to holding people accountable who abuse their positions of trust for personal benefit.

Shan Hanes’s illegal schemes betrayed Heartland Bank and its investors and jeopardized confidence in financial institutions. Korey Brinkman from the FHFA-OIG reassured that the agency remains committed to investigating and addressing fraud-related crimes.

Pig-butchering crypto scams increasing

According to INTERPOL’s Global Financial Fraud assessment released earlier this year, pig-butchering crypto schemes have increased. The FBI’s Internet Crime report revealed that losses from investment scams surged to a record 38% last year. Some estimates suggest that pig-butchering scams have amassed an astonishing $75 billion from early 2020 through Feb. 2024.

This case serves as a stark reminder of the potential risks associated with digital currencies, especially when handled by those with bad intentions. For the financial sector, it underscores the importance of robust security measures and vigilant oversight to prevent similar incidents in the future.

Related | Nigeria announces tax on crypto ownership

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Zunain is an experienced crypto writer with a passion for delivering insightful and engaging content to audiences seeking up-to-date information about cryptocurrency and finance. With several years of experience, Zunain has a deep understanding of blockchain technology, digital assets, and the intricacies of the financial market. In his spare time, he loves traveling and enjoys playing cricket, snooker, and football.
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