Heartland Tri-State Bank: a CEO's pig-butchering scam wires $47.1M and sinks the bank (2023)

Shan Hanes ran Heartland Tri-State Bank in Elkhart, Kansas. He had chaired the Kansas Bankers Association, sat on the American Bankers Association board and testified before Congress. In December 2022 a stranger messaged him on WhatsApp. By July 2023 he had wired $47,105,000 of the bank's money, in 11 transfers, to a crypto exchange and on to scammers he never met, chasing an investment dashboard that showed $40 million in fake gains. Before touching bank funds he'd taken $40,000 from his church, $10,000 from a local investment club and $60,000 from his daughter's college fund. The bank failed on 28 July 2023, one of five US bank failures that year. Hanes pleaded guilty to embezzlement and got 293 months. Status: the CEO is in prison, the scammers were never found, and the bank is gone.

How it unfolded

The pattern is textbook pig butchering: a relationship first, an investment second, then an endless loop of payments to "unfreeze", "verify" or "activate" money that never existed. Prosecutors used the term in their own filing. They never found out who was on the other end: "the true identity of the co-conspirator, or conspirators, remain unknown."

Tip: if getting your money out requires sending more money in, there is no money. That one rule beats every dashboard.

The wires and the controls

Every wire had two approvers, as the bank's policy required. The Federal Reserve's Inspector General found the problem elsewhere. Heartland had a $5 million per-sender daily limit. Three of the first seven wires blew through it by $1.7 million to $5.3 million. On 24 June the board cut the limit to $3 million. All three wires after that exceeded it too.

The CFO doubled as the bank's compliance officer and approved wires alongside colleagues. The bank's own rules called for a suspicious activity report on insider abuse of any amount. The first one was filed on 24 July, after the last wire had cleared.

Here's the lesson that usually gets missed. A second signature from someone who reports to the fraudster is not a check on the fraudster. What was missing was escalation that leaves the building: hard wire limits, and a rule that anything over a threshold, or any exception, goes to the board.

Who lost what

The federal case moved quickly. Charged by Information on 2 February 2024. Guilty plea on 23 May to a single count of embezzlement by a bank officer. Sentenced 19 August. When the Federal Reserve banned him from banking on 21 November 2024, the order noted he'd agreed to restitution of up to roughly $60.5 million. There was also a 29-count state case in Morton County, reported as heading to trial in 2025; the sources used here don't say how it ended. The FDIC, as receiver, later settled two civil claims: $1,125,000 from a former bank officer who denied liability, and $1,845,000 from the bank's bond insurer.

What stops it

• Enforce wire limits, no matter who's asking. They existed here and were ignored six times.
• Tiered escalation to the board for large or exception wires. The regulator's interviewees named this as the gap.
• Exceptions are a board matter too. The person who benefits can't be the one who grants them.
• File the SAR. An insider sending huge, odd wires to a crypto exchange? That's exactly what the form exists for.
• Don't let one person be CFO and compliance officer if you can help it. And keep an eye on money routed through related parties.
• Teach FinCEN's pig-butchering red flags. Borrowing to buy crypto. Talk of "unfreezing" funds. A counterparty who exists only on WhatsApp.
• Make it possible to tell the CEO no. A customer managed it. Nobody on the payroll did.

See also pig butchering, the DOJ $225M USDT forfeiture and the NanoBit WhatsApp case.

Common questions