A former bank CEO fell for a cryptocurrency scam after being promised by bad actors a chance to grow their money, and this led to the bank's collapse after losing $47 million. In the court's recent verdict, a federal judge handed a sentence of more than 24 years in prison to the bank's former top executive, after he stole a massive amount of money from the company.
Former Bank CEO Fell for Crypto Scam, Gets 24 Years in Prison
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The District of Kansas' US Attorney's Office shared a press release detailing how a two-year crypto scam led to Heartland Tri-State Bank's (HTSB) CEO, Shan Hanes, getting a 24-year prison sentence. It was regarded that Hanes used his position as the chief executive of the bank to use funds for his "investments" which was later determined as a pig-butchering scam.
It was revealed that Hanes first used his funds, and then stole from a local church, a local investor club, and his daughter's college fund to transfer into the scammer's cryptocurrency wallet.
After this, he stole from HTSB's funds from May to July 2023, and later from a neighbor, Brian Mitchell, to whom he asked for $12 million. Mitchell refused to share the money and this led to Hanes asking bank employees to wire millions to the scammers.
Mitchell then reported it to the bank's board and Hanes was fired afterwards.
Hanes later pled guilty to one count of embezzlement and was charged with more than 24 years to serve in prison.
The pig-butchering scam that Hanes fell for cost the bank as much as $47 million in losses. This led to investors and customers losing money, and eventually, HTSB's collapse.
Crypto Scams and Its Proliferation
The growing list of cryptocurrency scams in the world is still rising, as threat actors massively profit from these activities, with most of the cases using methods like phishing or appearing as fake executives. One of the most notorious forms is called a "pig-butchering scam" which already recorded millions of victims, rapidly jumping from thousands of people deceived into giving away their cryptocurrencies.
Additionally, there are also phishing campaigns that lead to users logging into dubious websites or platforms whichwould then grant hackers access to their accounts. On the other hand, threat actors have become more elaborate in recent years, developing fake crypto apps mainly used for scamming people, and as noted by the FBI, they deceive the public into logging in.
Many people are falling for scams, especially those that appear legitimate and have convincing promises regarding massive returns or growth in their investments. However, for Hanes' case, it was not as simple as falling for a scam, as he embezzled money from the bank to use for his personal gains, leading to the bank's $47 million losses and eventual collapse, and his 24-year prison sentence.
