Shan Hanes, the former CEO of Heartland Tri-State Bank, who was arrested in 2024 for embezzling millions, has now been revealed as the largest victim in a vast international crypto scam network, according to a recent Department of Justice (DOJ) complaint.
DOJ Exposes Massive Crypto Laundering Ring
A new complaint filed by the DOJ targets over $225 million in laundered USDT, connected to a fraudulent scheme originating from a Philippines-based call center.
This same operation tricked Hanes, whose $47 million embezzlement contributed to his bank’s collapse in 2023.
The DOJ traced these illegal activities through 237 accounts on the crypto exchange OKX, uncovering an estimated $3 billion in transaction volume linked to 434 victims worldwide.
This case marks one of the most extensive fraud busts involving digital assets and adds to growing concerns over the exploitation of decentralized finance by global crime syndicates.
How the Scam Operated
According to the DOJ, the fraud involved “pig butchering” scams, where victims are tricked into sending USDT to 93 controlled deposit addresses.
From there, the crypto was funneled through 100 intermediary wallets to obscure the transaction history.
These funds eventually landed in 22 primary OKX accounts, and were dispersed further through 122 more accounts, all connected by shared IP addresses, reused identification documents, and suspiciously coordinated activity.
This web of accounts allegedly traces back to ITECHNO Specialist Inc., a Manila-based scam organization.
The DOJ noted the laundered transactions displayed clear signs of coordinated automation, suggesting the use of bot-controlled wallets and sophisticated obfuscation tools to avoid detection.
Analysts believe the scale of this scheme highlights urgent gaps in the global crypto compliance infrastructure.
Shan Hanes: From Perpetrator to Top Victim
Despite orchestrating a major financial crime, Hanes became the scam’s biggest casualty. Of the $47.1 million he stole between May 30 and July 7, 2023, $3.3 million has been identified within the DOJ’s seizure.
His illegal transfers were strategically timed between bank regulatory reporting periods, allowing him to bypass detection temporarily.
Heartland Tri-State Bank, which held $139 million in assets and $13.7 million in capital, collapsed under financial pressure after the loss.
Hanes’ actions drained liquidity, triggered $21 million in emergency loans, and left a $35 million shortfall, prompting regulators to shut the bank down in July 2023.
In addition to his role at the bank, 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 fund
- Nearly $1 million in liquidated stock from Elkhart Financial
He was sentenced to 24 years in prison in August 2024, with the DOJ labeling him both a fraudster and a victim in their filings.
This dual designation underscores the complex nature of modern financial crime, where perpetrators can also be manipulated by more elaborate schemes.
Crypto Assets Seized May Enter Federal Digital Reserve
The crypto assets recovered in this case are likely to be earmarked for a federal digital asset reserve, a stockpile mandated by former President Donald Trump.
Although not yet fully operational, the U.S. Treasury is auditing crypto holdings to organize them into two distinct funds — one for bitcoin (BTC) and another for other tokens, including USDT.
While the current complaint reveals substantial seized assets, only a fraction of victims have been positively identified, making fund recovery uncertain for many.
Experts warn that unless enforcement and regulatory tools evolve rapidly, cases like this may become more frequent in the expanding world of crypto finance.
The case of Shan Hanes illustrates a staggering convergence of financial fraud and international crypto crime.
While Hanes orchestrated a significant embezzlement that led to a local bank’s downfall, he was ultimately outmaneuvered by a global cybercrime syndicate.
The DOJ’s record-breaking bust not only uncovers a sophisticated laundering operation but also raises pressing questions about crypto security, regulatory oversight, and the future of victim compensation.
As crypto scams grow in scale and sophistication, regulatory bodies must work together globally to protect investors and enforce digital accountability.