Feds Bust Pig Butchering Scams: Recover $5M, Ex-Kansas Bank CEO Sentenced

Key takeaways:

• US authorities declared victory in two cases involving crypto pigs’ butchering. In one, money was found, while in another, the previous head of the bank was put behind bars.
• As money is being quickly transferred to cryptocurrency accounts abroad, US Attorney Michael Easley claimed that Americans are losing their life savings to these schemes.

This week, US authorities declared victory in two cases involving crypto pigs’ butchering. In one, money was found, while in another, the previous head of the bank was put behind bars. 

The US District Attorney’s Office for the Eastern District of North Carolina announced on August 22 that a pig slaughtering ring’s roughly $5 million worth of Tether was seized. 

It claimed the money could be tracked to crypto addresses connected to money laundering schemes using crypto pig butchering earnings. 

As money is being quickly transferred to crypto accounts abroad, US Attorney Michael Easley claimed that Americans are losing their life savings to these schemes. He continued, saying:

“In this case, one victim lost his entire individual retirement account to a scam.”

Pig butchering happens when a con artist establishes an online rapport with a victim who is “fattened up” and then gets tricked into investing in a phony project that costs money. 

Here, scammers approach victims by pretending to be in a love relationship to gain their trust and then lure them into investing in a fake crypto trading platform that sounds much like the real deal.  

Fortunately, the victim’s assets were tracked by FBI analysts and federal investigators into and via multiple crypto wallets, which Tether helped to seize. This week, multiple instances of pig butchering were observed. 

Shan Hanes, the former CEO of Heartland Tri-State Bank in Elkhart, Kansas, was given a sentence of more than 24 years in prison, according to a report released on August 19 by the US Attorney’s Office for the District of Kansas.

Hanes entered a guilty plea to embezzling $47.1 million from the bank between May and July 2023 using 11 wire payments to crypto wallets. 

He stole money from a nearby church, an investing club, and even his daughter’s college savings account in order to finance the pig slaughtering operation while he was a victim of it. The scammers claimed they required the money to unlock his alleged returns, so it was sent to ostensibly purchase more crypto, according to CNBC. 

The Federal Deposit Insurance Corporation (FDIC) covered the bank and took on the $47.1 million loss; however, Hanes’ dishonesty led to the bank’s collapse and $9 million in damages for investors.

Regular crypto users are also targeted by scammers. A security expert warned of fraud using an Asian woman who is knowledgeable about crypto trading on X on August 21. 

According to reports, she deceives people into making a lot of money on a phony crypto site, then demands a 15% withdrawal charge. This is simply one instance of the many pig-butchering frauds that have taken over dating apps and social media.