Former Kansas bank boss sentenced to 24 years in prison after falling for ‘pig slaughter’ scam

U.S. authorities have sentenced 53-year-old Shan Hanes to 293 months in prison for using his position as CEO of Heartland Tri-State Bank to steal $47 million, ultimately leading to the institution's demise.

But Hayes, who was sentenced to 24 years in prison for initiating 11 outgoing wire transfers between May 2023 and July 2023, fell victim to a widespread cryptocurrency scam known as “pig slaughter.”

His activities led to the bankruptcy of Heartland Tri-State Bank, bank investors lost $9 million, and the FDIC had to bear the total loss of $47 million.

“Hanes' greed knew no bounds. He violated his professional duties, his personal relationships and federal law. Shan Hanes not only defrauded Heartland Bank and its investors, but also undermined trust in financial institutions with his illegal activities,” said U.S. Attorney Kate E. Brubacher.

'Pig slaughter'

Pig slaughter is a widespread fraud that occurs primarily in Southeast Asia and is due to the practice of fattening pigs before slaughter.

Typically, scammers on social media or dating apps will establish a seemingly harmless connection and form a friendship (or enter into a romantic relationship) with the victim. Often, the profiles will depict a handsome man or a beautiful woman.

After building a relationship with their victims – the “fattening phase” – the scammers gradually introduce them to the idea of ​​investing, usually in cryptocurrencies, often claiming that the perpetrators have made large profits.

The scammers then manipulate their victims into depositing large sums of money into investment platforms controlled by the criminals. Once they are unable or unwilling to deposit more, victims lose access to their original funds and are informed that they can only get them back by depositing more money.

Of course, all other deposits will also be stolen.

The amount of money lost to pork slaughter varies. A group of researchers from the University of Texas published a study on the economics of pork slaughter that found victims have lost up to $75 billion since January 2020. According to the Global Anti-Scam Organization, at least 1,838 people in 46 countries have lost an average of $169,000 to pork slaughter since June 2021.

A detailed report by ProPublica says many victims are surprised by the effectiveness of this trick. “I have to say, it's brilliant,” said a Silicon Valley CEO who reportedly lost $800,000 and asked to remain anonymous out of shame.

Pig slaughter involves elements of human trafficking.

ProPublica described that there are two victims in traditional pig slaughterhouses. Criminals lure unsuspecting job seekers to countries like Cambodia for forced labor. After arriving at concentration camps, victims are typically assigned to one of three tasks: sex work, hard labor, or cyber fraud like pig slaughter.

A 2024 report by Chainalysis confirms the findings, describing the conditions faced by the paradoxical victim-perpetrator as “appalling”: they work 12-hour days, and if they fail to meet their quotas in contacting potential victims, they are beaten, tortured, and even denied food by gangs.

Increase in “love scams”

According to a 2024 report by Chainalysis, pig slaughter, also known as love scams, doubled from 2022 to 2023.

Activity related to this type of scam increased 85-fold from 2020 to 2023, with this type of scam having the worst financial impact on victims. The average payment size for “romance scams” ​​in 2023 was $4,593, followed by NFT scams at $3,095 and giveaway scams in third place at $1,113.

According to the South China Morning Post, there are a number of Chinese-led criminal organizations in Southeast Asia, with one of the largest in Myanmar hosting more than 2,000 people who are victims of human trafficking and romance scams.