ChainCatcher news reports that the FBI successfully recovered $8.3 million misappropriated by a former CEO of a Kansas bank, which was stored in a cryptocurrency account in the Cayman Islands. On Monday, November 4, 2024, in a federal court in Kansas, 30 community bank shareholders erupted in relieved sobs upon learning they would fully recover their investments.
In August of this year, former CEO of Kansas' Heartland Tri-State Bank Shan Hanes was sentenced to 24 years in prison for misappropriating $47 million of client funds and transferring them into a cryptocurrency account operated by scammers. Prosecutors stated that Hans also stole funds from a church, investment clubs, and his daughter's college fund, losing $1.1 million of his personal funds in the scam. Hans' bank was closed and sold by federal regulators due to depleted funds. The $47.1 million deposits of clients were insured and paid by the Federal Deposit Insurance Corporation (FDIC). However, the $8.3 million investment of the 30 community bank shareholders was once thought to be lost.
Prosecutors stated that Hans fell victim to a scam known as a 'pig-butchering' scheme. In this scam, a third party gains the victim's trust and over time persuades them to invest all their funds in cryptocurrency, after which the funds immediately disappear. Hans began buying cryptocurrency he thought was worth $5,000 at the end of 2022, communicating with someone who contacted him through WhatsApp. By the summer of 2023, he had transferred $47.1 million of client funds in just 11 wire transfers over a span of 8 weeks.