Shan Hanes, the Heartland Tri-State Bank CEO, caused a massive banking scandal after both falling victim to and helping perpetuate a massive crypto scam.

The FBI revealed that over $47 million was stolen from investors as a result of a pig butchering scheme. Pig butchering involves a scammer promising large returns on investment before they suddenly disappear with all of your money.

In this case, Hanes found the scammers on WhatsApp, a messaging service. He started by investing some of his own money. His initial investments were very profitable.

However, pig butchering almost always goes further than running away with the initial investment. In this case, the scammers provided a steady return for nearly a year before vanishing.

Starting in late 2022, Hanes began to siphon money from his bank, diverting the funds into his crypto scheme. Since he saw regular returns, he continued to drain money from his investors wallets until he’d given the scammers more than $47 million of his investor’s money.

According to information from the Department of Justice, Hanes made 11 separate wire transfers.

Finally, in 2023 they pulled the plug, disappearing with everything. Hanes’s bank collapsed overnight.

This prompted an FBI investigation into Hanes. Authorities tracked one of the crypto wallets that the scammers used and eventually recovered $8 million. The remaining $39 million has yet to be found.

Hanes was arrested soon after all of this was discovered. In August 2024, he pleaded guilty to embezzlement and was sentenced to 24 years and 5 months in prison.

Despite authorities arresting Hanes and recovering some of the stolen funds, the scandal negatively damaged trust in the financial integrity of banks in Kansas.

“(Hanes’s) job, the bank’s job was to protect its customers and identify fraudulent scams – not to participate in them,” said Stephen Cyrus, the special agent in charge of the investigation.