Former US Bank CEO Sentenced for $47M Crypto Scam

Former Heartland Tri-State Bank CEO Shan Hanes has been sentenced to more than 24 years in federal prison for stealing $47 million in a crypto scheme.

The former CEO had transferred the funds from Heartland Tri-State Bank to various cryptocurrency wallets controlled by scammers after falling prey to a “pig butchering” scam. This eventually led to the collapse of the bank and the Federal Deposit Insurance Corporation (FDIC) taking over.

Hanes made a series of wire transfers over eight weeks. He also tried misappropriating funds from a local church, an investment club, and his daughter’s college savings account. He used the funds to transfer money, mostly to purchase cryptocurrencies as directed by the scammers. Ultimately, he didn’t make any profit and lost all the money he had stolen as a result of the scam.

Pig butchering scams have been happening across the United States. In such scams, the fraudsters engage in long-form communication with the victims, forming what looks like a genuine relationship, and finally ask them to invest in fake cryptocurrency platforms.

The losses from investment scams have surged to around 38%, which was a record high in 2023, as per the FBI Internet Crime Report. The report further mentions that among the $4.57 billion in funds that were reported to be stolen, around $3.96 billion involved fraudulent crypto investments and activities.

A United Nations report suggests that pig butchering scams are mostly done via forced labor and usually happen in Southeast Asia. The crimes in this region also include gambling, particularly online gambling.

The report further adds that there are specific organized groups in the Southeast Asian regions which have been running scam operations in a seamless manner.

Notably, the dangers of pig butchering scams translate to deception, financial exploitation, and emotional and financial loss for the victims. This incident involving Hanes serves as a reminder that even seasoned professionals can fall prey to these kinds of fraudulent schemes. As the cryptocurrency landscape expands, the need for vigilance, due diligence, and regulation is more important than ever.

Governments around the world like India, China, and Russia have been famous for their rigid stances on cryptocurrencies. While recent trends indicate a shift toward more flexible policies, these countries aim to enforce robust regulation to address the risks that come with these digital assets.

Gairika holds positions in BTC. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official media and publications of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.

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