A former chief executive officer (CEO) of a US bank has been sentenced to more than 24 years in federal prison for embezzling $47 million in a cryptocurrency fraud scheme. According to CNBC, Shan Hanes, the former Heartland Tri-State Bank CEO, fell for a “pig butchering” scam that had him purchasing crypto “to unlock the supposed returns on his investments,” which he never received. The 53-year-old orchestrated a series of wire transfers over just eight weeks last year that led to the collapse and Federal Deposit Insurance Corporation (FDIC) takeover of Heartland Tri-State Bank in Elkhart, one of only five US banks that failed in 2023. 

Pig butchering scams have become increasingly common in recent years. This scam usually involves a scammer finding and contacting a victim through a messaging app, dating app or a social media platform. They then try to form a relationship with their victim before eventually luring them into making a series of crypto investments. 

According to CNBC, Mr Hanes, from May to June 2023, made a series of wire transfers using the bank’s funds. He also embezzled money from a local church, an investment club and his daughter’s college savings account. The scammers reportedly duped him into buying cryptocurrency, insisting that they needed more funds to unlock the supposed return on his investments. However, the 53-year-old never realised any profit, and lost all of the money he stole, as a result of the scam. 

Last week, US District Judge John Broomes sentenced Mr Hanes to 24 years in prison – 29 months more than what prosecutors requested after he pleaded guilty in May to a single count of embezzlement by a bank officer.

“Hanes’ greed knew no bounds,” US Attorney Kate E. Brubacher said in a statement. “He trespassed his professional obligations, his personal relationships, and federal law. Not only did Shan Hanes betray Heartland Bank and its investors, but his illegal schemes also jeopardized confidence in financial institutions,” the attorney added. 

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Separately, Brian Mitchell, Mr Hanes’ longtime next-door neighbour, called the ex-CEO’s actions “pure evil” during the sentencing. He also said that during the sentencing Mr Hanes’ showed little remorse for his actions. 

According to the outlet, Mr Hanes began stealing after being targeted in a pig-butchering scheme in late 2022. He started making the wire transactions after communicating with the scammers on WhatsApp – whose identities are still unknown. Initially, he used personal funds to buy crypto, but in early 2023 he stole $40,000 from Elkhart Church of Christ and $10,000 from the Santa Fe Investment Club. he then used $60,000 taken from a daughter’s college fund, and nearly $1 million in stock from the Elkhart Financial Corporation. In May 2023, he then began to make wire transactions from Heartland Tri-State Bank to accounts controlled by scammers. 

Eventually, Mr Hanes was fired, and the bank was shattered and taken over by the FDIC. the 53-year-old was charged last February and placed under house arrest until his sentencing last week.