Pig butchering scams, a particularly insidious form of financial fraud, involve building trust with victims through fabricated relationships before ultimately presenting them with a fraudulent business opportunity. This scheme, often leading to devastating financial losses, has claimed another victim: Shan Hanes, former CEO of Heartland Tri-State Bank in Elkhart, Kansas. Hanes was recently sentenced to 24 years in prison for embezzling $47.1 million from the bank, falling victim to a pig butchering scam himself.
The scam unfolds in a calculated manner. Initially, the scammer gains the victim’s trust through a genuine-seeming online relationship, often over a prolonged period. Once this bond is established, the scammer introduces a seemingly lucrative business opportunity, promising significant returns. The victim, blinded by trust and the promise of wealth, invests funds. However, these ‘investments’ are merely a smokescreen; the true objective is to fleece the victim.
The ‘butchering’ phase begins as the scammer demands further investments from the victim, claiming these are necessary to ‘secure’ or ‘guarantee’ the previous investments. Each demand becomes more urgent, pressuring the victim to invest more and more. Hanes, sadly, fell prey to this scheme. He initially invested thousands of dollars of his own money into the scam. As the demands escalated, Hanes began stealing funds from local organizations and even his daughter’s college fund, ultimately transferring nearly $50 million from the bank. Despite being warned about the scam, he continued to pour money into the scheme.
The consequences of Hanes’ actions were catastrophic. Eleven transactions made between May and July 2023 resulted in a $9 million loss for bank investors, forcing the Federal Deposit Insurance Corporation (FDIC) to absorb the $47 million loss and seize the bank. Tragically, some bank customers, including Hanes, lost nearly all their retirement funds.
Hanes’ case serves as a stark reminder of the devastating impact of pig butchering scams. The perpetrators exploit trust and vulnerability, leaving victims financially ruined and emotionally shattered. This case underscores the importance of remaining vigilant against online scams, recognizing the warning signs, and seeking help from authorities if you suspect you may be a victim.
