TechFlow news — On November 5, according to Fortune, the U.S. Federal Bureau of Investigation (FBI) successfully recovered $8.3 million stolen by the former CEO of a Kansas bank, funds that had been held in a cryptocurrency account in the Cayman Islands. On Monday, November 4, 2024, at a federal court in Kansas, 30 community bank shareholders broke into relieved sobs upon learning they would receive full restitution for their investments.
In August this year, Shan Hanes, the former CEO of Heartland Tri-State Bank in Kansas, was sentenced to 24 years in prison for misappropriating $47 million in customer funds and transferring the money into cryptocurrency accounts operated by scammers. Prosecutors said Hanes also stole from church collections, investment clubs, and his daughter’s college fund, losing $1.1 million of his own money in the scam. His bank was shut down and sold by federal regulators after running out of funds. The customers’ $47.1 million in deposits were insured and reimbursed by the Federal Deposit Insurance Corporation (FDIC). However, the $8.3 million invested by the 30 community bank shareholders had previously been considered lost.
Prosecutors said Hanes fell victim to a scam known as “pig butchering.” In this type of fraud, a third party gains the victim’s trust and gradually convinces them to invest all their money into cryptocurrency, after which the funds quickly vanish. Starting in late 2022, Hanes began purchasing what he believed to be $5,000 worth of cryptocurrency, communicating with an individual who contacted him via WhatsApp. By the summer of 2023, he had transferred $47.1 million in customer funds through 11 wire transfers over just eight weeks.
