Latest news about Bitcoin and all cryptocurrencies. Your daily crypto news habit.
The Federal Bureau of Investigation (FBI) has recovered $8.3 million in stolen funds connected to a cryptocurrency scheme that led to the collapse of Heartland Tri-State Bank in Kansas.
This recovery provides a measure of restitution for 30 victims, including community members who had entrusted their investments to the bank’s former CEO.
The Heartland Tri-State Bank collapse
Shan Hanes, the former chief executive of Heartland Tri-State Bank, was sentenced to 293 months in prison for embezzling $47.1 million in a cryptocurrency scam that ultimately caused the bank’s failure, according to an Associated Press report.
While the Federal Deposit Insurance Corporation (FDIC) insured and repaid the $47.1 million lost by customers, the scheme resulted in a separate $9 million loss for the bank’s investors.
The FBI’s recent recovery of $8.3 million represents a significant step towards compensating these investors.
US Attorney Kate E. Brubacher stated that the Justice Department, through Hanes’ conviction and sentencing, secured justice for the victims, and this court order now provides some financial relief.
Anatomy of a ‘pig butchering’ scam
Court records reveal that the scheme unfolded during the summer of 2023. Over an eight-week period, Hanes executed 11 wire transfers, totaling $47.1 million, from customer accounts.
He believed these payments were necessary to finalize investments and cash out on a cryptocurrency website.
Prosecutors described the scam as a classic “pig butchering” scheme, where victims are manipulated into investing heavily in cryptocurrency, only to have their funds disappear.
Hanes initially invested what he believed to be $5,000 in cryptocurrency in late 2022, following instructions from an individual he communicated with via WhatsApp.
In the following months, he invested funds from his church and an investment club before resorting to embezzling customer accounts, leading to the bank’s collapse.
The post FBI recovers $8.3m in Kansas bank crypto scam: victims to receive restitution appeared first on Invezz
Publication date
Disclaimer
The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.