DoJ Initiates $225M Civil Forfeiture Proceedings Related to Crypto Fraud Committed by Infamous CEO Shan Hanes
It appears that the Kansas banker (Shan Hanes) who defrauded millions from his small-town bank in Kansas, ended up losing a significant portion of his stolen assets to a pig butchering crypto scam associated with a call center in the Philippines, as detailed in a Department of Justice (DoJ) complaint.
Per the complaint submitted on 18 June 2025, prosecutors within the DoJ have commenced a civil forfeiture action related to more than $225 million in laundered USDT, associated with Shan Hanes, the disgraced CEO of Heartland Tri-State Bank, who embezzled over $47 million from the institution, leading to the collapse of the agricultural lender in 2023.
A crypto exchange provided crucial data to the DoJ, enabling the regulatory agency to uncover a sophisticated operation employed by the criminals for laundering illicit funds.
Law enforcement has retrieved a total of 93 deposit accounts, where fraudsters manipulated their targets into depositing USDT. Once victims made their deposits, the funds passed through as many as 100 intermediary wallets to conceal their origin and mix deposits from multiple individuals.
After obscuring the funds’ source, the fraudsters transferred the money to OKX accounts in two phases of reshuffling. Initially, the funds were sent to 22 OKX holding accounts, then reorganized among 122 more OKX accounts.
BREAKING: Kansas banker Shan Hanes, who embezzled $47M from Heartland Tri-State Bank, lost millions to overseas crypto fraudsters in a DOJ-exposed $225M USDT laundering operation.
• DOJ connects scam to
• OKX assisted in tracing 200+ wallets
• Bank collapsed in 2023
• Hanes… pic.twitter.com/X6Atn9znlO— CryptoAI (@QCryptoAI) June 19, 2025
All OKX accounts were interconnected through shared IP addresses and reusable KYC documentation, traced back to a crypto scam operation based in Manila – ITECHNO Specialist Inc.
The DoJ has projected an astounding $3 billion in transaction volume produced by this Manila-centered laundering platform.
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Hanes Classified as Both a Perpetrator and a Victim
The DoJ complaint indicates that Hanes embezzled millions from the Heartland Tri-State Bank from 30 May to 7 July 2023, a timeframe that coincided with the bank’s quarterly regulation reporting periods, to evade detection. During this interval, Hanes executed 10 wire transfers totaling slightly over $47.1 million.
The complaint also references the Federal Reserve’s (FED) report on the downfall of Heartland Tri-State Bank. The regulatory authority identified a total of 434 victims of the crypto fraud, with 60 individuals collectively losing approximately $19.4 million.
Heartland Tri-State Bank, which maintained $13.7 million in capital and $139 million in assets, faced liquidity challenges due to Hanes’s misconduct, prompting the bank to seek emergency borrowing of $21 million.
This resulted in a substantial $35 million deficit in the bank’s finances, leading to its shutdown by regulators in July 2023.
Additionally, as previously reported by CNN, Hanes also misappropriated $40,000 from the Elkhart Church of Christ, $10,000 from the Santa Fe Investment Club, $60,000 from his daughter’s college savings, and nearly $1 million in stocks from the financial firm, Elkhart Financial.
In August 2024, Hanes was sentenced to 24 years in prison. Meanwhile, the DoJ has classified him as both the perpetrator and a victim of this specific pig butchering scam.
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Crypto Scam Assets Destined for FED Holdings
Although the Bitcoin reserve and stocks of other cryptocurrencies are not yet established, the confiscated USDT is likely to be included in the FED’s crypto stockpile.
The Treasury Department has been reviewing the US government’s digital assets to assess which cryptocurrencies and other digital assets it should retain.
As officials have only managed to retrieve a small fraction of those impacted by the scam, full restitution to victims from the seized USDT remains uncertain.
Key Takeaways
- Shan Hanes lost $3.3M from his embezzled $47M to a pig butchering scam
- Scammers reshuffled stolen funds in two phases linked to a total of 144 OKX accounts
- Investigators traced all OKX accounts to a compound in Manila, Philippines
The post DoJ Files $225M Civil Forfeiture Case Linked to Crypto Scam Perpetrated by Disgraced CEO Shan Hanes appeared first on 99Bitcoins.
