Kansas Bank Commissioner responds to massive Elkhart crypto scam, sends warning
ELKHART, Kan. (KAKE) - "I was surprised. I was shocked. I was disappointed. All of those feelings. How could this happen? Why did it happen," said Kansas State Bank Commissioner David Herndon.
Herndon is talking about the massive cryptocurrency scam at the Heartland Tri-State Bank in Elkhart.
"A cryptocurrency scheme that the FBI is now referring to as 'Pig Butchering,'" he said.
Herndon says a 'Pig Butchering' scheme is just like it sounds. A scammer convinces a victim into supposedly legitimate virtual currency transactions, and then 'butchers' them by stealing the money.
In this case, Herndon says the butcher was Shan Hanes, the bank's own CEO. Now, he's facing charges of embezzling nearly $50 million, a loss that caused the bank to fail last August.
Herndon says it's not just Kansas that's seeing this problem.
"According to the FBI, it's increasing investment fraud. From '21 to '22, it increased 183%. And it's now into the billions of dollars that's, that's being stolen," said Herndon.
Court documents say Hanes stole the money from a local church and an investment club.
While crypto scams aren't always this extreme, Herndon says they'll likely keep increasing, so you should always keep your guard up, and as always, if you see something, say something.
"Nobody is immune, whether it's an individual or business, or a municipality," Herndon said. "So pay attention. Don't click on unknown links or reply to emails that you're not familiar with or not aware of. And if you do find or feel that you're a victim, call law enforcement."
If convicted of the crimes, Hanes could spend up to 30 years in prison and pay a fine of up to $1 million.