The U.S. Department of Justice (DOJ) has filed a civil forfeiture complaint targeting over $225 million in laundered USDT, tied to one of the largest pig butchering scams ever uncovered. At the center of this scheme is Shan Hanes, the former CEO of Heartland Tri-State Bank in Kansas, who embezzled $47 million before the bank collapsed in 2023.
DOJ Uncovers Global Crypto Laundering Network
According to the DOJ, Hanes was the largest individual victim in a complex international crypto laundering network operated out of a scam compound in Manila, allegedly run by ITECHNO Specialist Inc.
Key details from the DOJ complaint include:
- $3 billion in total transaction volume traced through 237 OKX accounts.
- Funds were routed via 93 scam-controlled deposit addresses and 100+ intermediary wallets to obscure origins.
- Crypto was laundered through 22 main OKX accounts, then shuffled across 122 additional accounts, all linked by reused KYC documents, shared IPs, and coordinated behavior.
How the Bank Collapse Happened
Between May 30 and July 7, 2023, Hanes wired nearly $47.1 million from Heartland Tri-State Bank to wallets he believed would generate crypto profits. The funds were moved between quarterly reports, allowing the theft to go unnoticed temporarily.
- The bank had $13.7 million in capital and $139 million in assets.
- Hanes’ actions drained the bank’s liquidity and forced $21 million in emergency borrowing.
- Ultimately, the bank was left with a $35 million capital shortfall and was shut down by regulators in July 2023.
Hanes also embezzled from other local entities, including:
- $40,000 from a church
- $10,000 from an investment club
- $60,000 from his daughter’s college fund
- Nearly $1 million in stock from Elkhart Financial
He was sentenced to 24 years in prison in August 2024.
Crypto Seizures and the Federal Stockpile
The $225 million in seized USDT may be added to a federal crypto stockpile ordered by President Donald Trump. While the official reserve hasn’t been launched yet, the Treasury Department is currently auditing seized assets to organize long-term holdings.
- Bitcoin reserves and altcoin reserves will be maintained in separate federal funds.
- The extent of victim compensation remains uncertain, with only 60 of the 434 victims identified so far, accounting for $19.4 million in losses.
Conclusion
This case illustrates the devastating impact of pig butchering scams and the dangers of unchecked financial access to crypto markets. It also highlights the critical role of global cooperation, advanced blockchain tracing, and regulatory vigilance as authorities crack down on fraudulent crypto operations. As the U.S. builds its crypto oversight infrastructure, the Heartland case is likely to shape future banking and compliance rules.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.