The CEO of Heartland Tri-State Bank has been charged with orchestrating a $47 million embezzlement scheme. This after it was revealed that the bank was part of a sophisticated “pig slaughter” scheme, as revealed on February 12 by the U.S. Attorney’s Office.
Shan Hanes, former CEO of Heartland Tri-State Bank, was formally charged with embezzling funds. He faces up to 30 years in prison. He is accused of defrauding the bank through a series of bank transfers “to purchase cryptocurrency for his own benefit” between May
The Financial Crimes Enforcement Network (FinCEN) describes “pig slaughter” as a scheme in which “victims invest in supposedly legitimate virtual currency investment opportunities before being cheated out of their money.”
FinCEN ‘s statement states that scammers call victims “pigs” and may use fictitious identities, cover-ups of potential relationships and contrived stories to “fatten” the victim so that they believe they are working with trusted companies before robbing them of their assets – known as “culling.
The exact details of the Hanes scam and the “pig slaughter” have not yet been revealed.
A recent regulatory review revealed that Hanes “conducted small cryptocurrency transactions through another bank as early as January 2023,” which included “personal funds and funds potentially belonging to another bank.” As a result, Hanes was arrested.
Investigators found Hanes’ answers “unreliable and inaccurate” because they “made no sense and were difficult to follow” when asked to explain a series of bank transfers made between May and June last year.
After a review, investigators concluded that “Hanes’ transactions on cryptocurrency exchanges, the amounts of which have been increasing over time, appear to be consistent with the progression of the pig slaughter scam.”
In addition, the regulatory review found that prior to its collapse in July 2023. Heartland Tri-State Bank had drawn $21 million from the Federal Home Loan Banking System. The Federal Home Loan Banking System was criticized for its involvement in the 2023 banking crisis after lending Signature Bank, Silvergate and Silicon Valley Bank $30 billion.
The federal housing banking system has “evolved into a general liquidity backstop for banks of all sizes,” according to a recent Bloomberg report by Austin Weinstein, a banking reporter.
On the other hand, Hanes’ first hearing on his involvement in the cryptocurrency scam is scheduled for February 28 in Wichita, Kansas.
