Shan Hanes, a former CEO of Heartland Tri-State Bank in Elkhart, Kansas, has been sentenced to 24 years in prison following his involvement in a cryptocurrency scam. Hanes illegally wired US$47.1 million (~RM204.8 million) from the bank, ultimately leading to its collapse.
The scheme Hanes was involved in is an instance of “pig butchering,” a type of scam where perpetrators build a false online relationship with victims to eventually convince them to invest in a seemingly legitimate opportunity. The scammers target individuals unfamiliar with cryptocurrency, first securing an initial investment before manipulating victims into giving more money, claiming it will “unlock” or “guarantee” the initial investment.
Hanes’ fraudulent actions affected not just the bank’s financial stability but also harmed a range of victims, including a church fund, a local investment club, and a child’s college savings fund. The scam resulted in a US$9 million (~RM39.1 million) loss for bank investors and forced the FDIC (Federal Deposit Insurance Corporation) to absorb the US$47 million (~RM204.4 million) loss.
However, many of these scammers are sometimes victims of human trafficking, committing these heinous acts against their own will. For example, young men from around the world, seeking jobs, are lured to countries like Thailand and then kidnapped by Chinese crime syndicates. They are then trafficked to compounds in Myanmar, where they are forced to impersonate people online and run scams using scripted dialogues. Those who resist face consequential violence and, in some more severe cases, are murdered.
Despite Hanes’ attempts to recover the money, the former CEO is also facing 28 additional charges related to the crypto scheme in Morton County District Court, North Dakota. That case, in which Hanes faces a potential sentence of another 86 months, is scheduled for trial in October.
(Source: TechSpot, The Verge, Banking Dive, Bloomberg)
