Pig Butchering is a financial scam, NOT a social event

[samhexum]

I guess there's an advantage to being cynical & uninterested in finding love...

Sitting at the kitchen table, Matt struggles to recount the events of the past few months. “As soon as I found out that it was a suicide, I was 100% sure that it was the scam,” he says.

“Our father was, from the day I was born until six months ago, always a positive, happy person. This was literally the only thing in his life that had happened, to where it changed him, and it just crushed him.”

On a horse farm in northern Virginia, surrounded by sprawling fields and stables, the family gathers at their younger sister Adrianne’s house - something they’ve done a lot in the three months since their father took his own life after falling victim to a so-called “pig butchering” scam.

The scams – mostly run out of Southeast Asia - are given that name because they involve “fattening up” victims before taking everything they have. The con artists behind them take on false online identities and spend months financially grooming their victims to get them to invest on fraudulent cryptocurrency websites.

Dennis Jones, an avid runner and photographer, was adored by his children and grandchildren. Described as “a bit of an activist” by his family, the 82-year-old spent much of his retirement working with refugees and debating politics online. But in the last few months of his life he withdrew from his family and, having been divorced for years, befriended a woman going by the name Jessie on Facebook.

The two had been talking online for months and built a close relationship. Eventually, Jessie convinced Dennis to invest in crypto.

Dennis complied. Without ever meeting Jessie in person, he spent everything he had, and when he had nothing left, she demanded more. Until one day the money disappeared, leaving him in ruin.

In early March, Dennis’ children scheduled a meeting to help their father get back on his feet after the scam. The plan was for him to move in with Adrianne and her family. “We wanted him to know that he was going to be taken care of,” Matt said.

But the morning of the meeting none of them could reach Dennis. Matt drove to Dennis’s apartment but he wasn’t home, and all calls went straight to voicemail. They figured he must be out on one of his long runs. An hour later, police knocked on Matt’s door to inform him that Dennis had taken his own life.

Dennis was one of countless victims of a massive global criminal operation predominantly run by Chinese gangs who have built a multibillion-dollar scam industry in Southeast Asia. There, they’ve assembled an army of scammers, many held against their will in guarded compounds and forced to con people all around the world out of their life savings.

It’s theft at a scale so large that investigators are now calling it a mass transfer of wealth from middle-class Americans to criminal gangs. Last year, the FBI estimates, pig butchering scams stole nearly $4 billion from tens of thousands of American victims, a 53% increase from the year before.

While the crime takes place online, its real-world consequences are devastating. Law enforcement sources predict that losses will continue to grow in the next year, and as the criminals remain out of reach, money and lives will continue to be lost.

Santa Clara county prosecutor Erin West has dedicated the last few years to fighting pig butchering scams. “I’ve been a prosecutor for over 25 years, I’ve done all kinds of different types of crime. I spent nine years in sexual assault. And I’ve never seen the absolute decimation of people that I’ve seen as a result of pig butchering,” she says.

Being in the heart of the tech industry in California’s Bay Area, Erin and her team were some of the first to begin investigating pig butchering scams. “We’ve got victims victimizing victims and the only winners are Chinese gangsters,” she says.

Shawn Bradstreet, US special agent in charge of the San Francisco field office, told CNN that some of the money stolen from American victims is spent on expanding the scam operations and the massive compounds that house them and other illicit activities.

West and Bradstreet are part of a small group of US law enforcement agencies working to find ways to tackle a crime that largely takes place online and overseas.

Social media is flooded with scammers hunting for victims, on WhatsApp, Facebook, LinkedIn and, increasingly, dating apps such as Bumble and Tinder.

“The unfortunate reality is that scammers may pull on the heartstrings on those looking for love or connection - on dating apps and on all online platforms,” a spokesman for Match group, which owns Tinder, said in a statement.

Both Match and Facebook and Whatsapp parent company Meta told CNN they are working to prevent scammers from using their platforms, by flagging suspicious language and educating their users. CNN has reached out to LinkedIn and Bumble for comment.

In May, a group of tech companies including cryptocurrency exchange platform Coinbase, Meta, Match group and the anti-scam charity organization GASO announced the “Tech Against Scams Coalition,” acknowledging that scams “are a pervasive issue across the entire tech landscape.”

But West says that’s not enough. She recently set up a task force called Operation Shamrock to bring together law enforcement, social media, crypto exchanges and traditional banks to tackle crypto scams.

A 2023 CNN investigation revealed that many of the scammers are themselves victims of human trafficking. Lured to Southeast Asia with promises of white-collar jobs, they are instead trafficked into Myanmar, Cambodia, Laos and other destinations. Since a 2021 military coup, Myanmar has become Asia’s scam capital where criminals can operate freely under the cover of a bloody civil war.

Today, city-sized compounds loom over the Myanmar side of the border with Thailand, with nothing but a dried-out river separating the two countries. Inside are what can only be described as scam factories — offices full of hundreds of slaves, working 16-hour days to befriend victims and convince them to invest in cryptocurrency on fake platforms that mimic legitimate crypto exchanges.

Those kept inside tell stories of torture and abuse, of scammers who don’t bring in enough money being beaten with electrical sticks and forced to do hundreds of squats as punishment.

Rakesh, an Indian national, was trafficked to a compound called Gate 25 in Myanmar after applying for an IT job in Thailand in late 2022. There he signed a scamming contract under threat of execution, and was trained to scam.

For 11 months he posed as “Klara Semonov,” a Russian investor based in Salt Lake City. To avoid gruesome punishments inflicted by his captors, he said he sent romantic messages to victims like Dennis to convince them to invest their money. “Seventy to 80% fall for fake love,” he said.

Rakesh was eventually released in 2023 when his contract ended. He believes he was let go because he simply wasn’t good enough at scamming. “They (were) treating us like slaves,” he told CNN days after his release in 2023.

Conveniently located on the border, the compounds use telecoms services from the Thai side. In November 2023 Thai Justice Minister Tawee Sodsong said they were working to cut off the compounds.

Pachara Naripthaphan of the Thai National Broadcasting Transmissions Commission has since told CNN that in May they instructed all telecom operators to shut off wireless services in proximity to any areas bordering Myanmar, Laos or Cambodia. Despite that, their data shows that illicit activity has continued at a baseline level as criminals adjust to using other means of connecting to the internet such as Starlink.

Even here on the border, where the physical distance is reduced to nothing but a narrow river, the criminals remain out of the reach of law enforcement, either locally or internationally.

“Many of these perpetrators are beyond my reach. And in order to establish deterrence, we need to prosecute some individuals who are running these operations in Southeast Asia,” Santa Clara district attorney Jeff Rosen says.

According to FBI data, out of nearly $5 billion dollars lost to cryptocurrency fraud in 2023, $3.96 billion was stolen in pig butchering scams. While Rosen’s office and the Secret Service have had some success in retrieving millions of dollars in stolen funds, no American law enforcement agency has been able to arrest a single suspected scammer.

Carina, who asked CNN to only use her first name, met “Evan” on Bumble in May 2023. His photos showed a blond man with piercing blue eyes. He claimed to be Dutch and showed off his wealth — expensive cars and Rolexes, though none of that appealed to Carina, a chemistry PhD and triathlete.

Their relationship moved fast. Right away he suggested they move their conversation to WhatsApp and delete the Bumble app to focus on getting to know each other. A few days later he started calling her “honey.”

“We’re doing that already?” Carina asked, in a text conversation seen by CNN.

Evan claimed he had made his money running a company with his uncle and investing in crypto. He told her she could pay off her student loans in a matter of months by investing. Carina was hesitant at first but eventually agreed to put in $1,000.

He told her not to use the official app of the Kraken crypto platform, and instead sent her a link to a parallel website which they used to trade in the coming months.

As their investments grew, so did their relationship. The two made plans for the future, romantic weekend getaways and family introductions, though they were yet to meet in person. “I’ve never met anyone like you before. Hard to believe I’m falling for a man I have never seen or spoken to,” Carina told him just a few weeks in.

The first red flag emerged when Evan pressured Carina to enter an “event” where she would have to invest $150,000 by the end of July to make extra profit. If she failed to reach the target, her account and money would be frozen.

Scared to lose the money she had already put in, Carina panicked. She took out a high-interest loan and borrowed money from friends and family to meet the deadline.

Despite all his purported wealth, Evan refused to help her, instead lying and telling her he was struggling to meet his target of $500,000 and needed her help, she said. At one point, Carina found herself consoling her scammer, telling him the money didn’t matter as long as they loved each other.

After Dennis took his life, his adult children were left piecing together what happened by going through his Facebook messages. There, they learned for the first time what Dennis had been dealing with.

“I have been having dark thoughts about my life and it being over. Certainly it looks like my financial life is done,” Dennis messaged his scammer in the months before his death. “And the ultimate pain here is that I have betrayed family trust. This is unbearable,” he writes in screenshots of their conversation seen by CNN.

“What’s most heartbreaking is reading through these messages. He was talking about having signs of a nervous breakdown. And so these were all shared with the profile,” Adrianne says.

“Instead of sharing with us,” Matt adds.

“What’s amazing here is that these scammers overseas have figured out a way that they can get victims to trust them over their own families,” West says. “It’s a major psychological stunt that they’re pulling on the rest of the world.”

Carina didn’t tell her family about what had happened and the stress she was under until the very final moment. After hitting their event targets, Carina tried to withdraw some of her money, but was unable to do so, having violated platform rules by investing in the same account as Evan. After months of hiding it, Carina told her family, who suggested she speak to Kraken directly.

The next morning she called Kraken customer services, who informed her there was no account under her name.

“I realized I had been scammed at that point. And I broke down,” Carina says. “It was all fake. It was a fake profile. It was a fake story. The amount of time that he spent grooming and getting to know me was incessant.”

Reading through their conversations a year later, Carina barely recognizes herself. “It’s actually heartbreaking for me to see the state that I was in,” she says.

The emotional and financial entanglement had taken a toll on her, and she was left reeling from a breakup and bankruptcy at the same time.

In the aftermath, Carina had to move back in with her mother. It will take her at least a decade to repay her debts.

Their grief still raw, Adrianne and Matt are only now starting to understand what happened to their father.

“He wasn’t up against one person. It’s a multibillion-dollar criminal organization with a playbook that’s playing on the emotions … It was almost like he was brainwashed to some extent,” Dennis’ daughter Adrianne says.

As the criminals’ tactics continue to evolve and law enforcement struggles to find a way to stop them, there will be more victims in 2024, and more people like Matt and Adrianne, who suffer a loss far greater than money.

“He died embarrassed, ashamed, financially devastated, heartbroken. And if sharing our story helps somebody else or another family, then it’s worth it,” Adrianne says.

https://www.aol.com/news/killed-scam-father-took-life-160016296.html

Edited June 18 by samhexum
for absolutely NO @%!*ING reason at all!

[+ Charlie]

I clicked on this thread mainly because I went to an actual pig-butchering once. It was an annual event in the small town in Czechoslovakia where I worked thirty years ago. Everyone got together at a farm on a Saturday to take part in butchering a fattened hog and taking home various pieces to cook.

[+ Vegas_Millennial]

1 hour ago, Charlie said:

I clicked on this thread mainly because I went to an actual pig-butchering once. It was an annual event in the small town in Czechoslovakia where I worked thirty years ago. Everyone got together at a farm on a Saturday to take part in butchering a fattened hog and taking home various pieces to cook.

Likewise, I was interested in pig butchering because the family of an ex of mine hosted an annual pig roast in their neighborhood.  They bought a whole slaughtered pig, kept it on ice, then smoked it overnight in a smoker.  The neighborhood brought sidedishes and drinks.  Other neighbors rented bouncy houses for the kids, and others rented portable toilets to put on the street.  It was an annual tradition that the entire street participated in.

[cany10011]

In the past 2 years, I learned that 3 people i know were "butchered". They are smart normal sane people but fell for these online romance scams. One guy lost 300K or so, another 70K and a girl lost nearly 100K. All were looking for love in the wrong places. Money is lost and irretrieveable.   The schemers are very sophisticated and know exactly what you need to tell the bank or someone when you are moving so much money; they even know the closest crypto atm and give you directions to get there. 

For me, I wouldn't even give a penny without any physical intimate contact. The girl was schemed by someone who worked on an "oil rig" and had limited opportunities to visit the mainland and needed her help to pay his staff. What BS. Anyone with half a brain would question their motives. 

[+ FrankR]

50 minutes ago, cany10011 said:

In the past 2 years, I learned that 3 people i know were "butchered". They are smart normal sane people but fell for these online romance scams. One guy lost 300K or so, another 70K and a girl lost nearly 100K. All were looking for love in the wrong places. Money is lost and irretrieveable.   The schemers are very sophisticated and know exactly what you need to tell the bank or someone when you are moving so much money; they even know the closest crypto atm and give you directions to get there. 

For me, I wouldn't even give a penny without any physical intimate contact. The girl was schemed by someone who worked on an "oil rig" and had limited opportunities to visit the mainland and needed her help to pay his staff. What BS. Anyone with half a brain would question their motives. 

We should all be warned. This is happening on Grindr too. Usually I am approached by a profile with pictures of muscular Asian men. The conversation is always awkward. They quickly shift the conversation to ask what you do for a living. At this point I usually say, I am not interested in crypto and report the profile, since I know what is coming. 

[samhexum]

7 minutes ago, FrankR said:

At this point I usually say, I am not interested in crypto and report the profile, since I know what is coming. 

And who won't be.

[cany10011]

31 minutes ago, FrankR said:

We should all be warned. This is happening on Grindr too. Usually I am approached by a profile with pictures of muscular Asian men. The conversation is always awkward. They quickly shift the conversation to ask what you do for a living. At this point I usually say, I am not interested in crypto and report the profile, since I know what is coming. 

I've been approached by slavic guys TGTBT that immediately want to switch to whatsapp. 

[SFGateboy]

I get these all the time, sometimes as a random text, but often through LinkedIn. "She" would randomly send photos of her at brunch or some shopping excursion, before telling me something about her uncle helping her with bitcoin investing. The conversation usually devolves into me sending unsolicited porn star dick pics and pestering her to see her boobs until she ignores or blocks me.

It passes time during the work day... 😃 

[+ DynamicUno]

The only thing new about this is the crypto angle, and the eye catching term for it.  "Pig butchering" has become the term of art about the scams, and pretty graphically describes how the victim's financial life is systematically stripped from them.  Romance/relationship scams have been around for decades, it's just become easier for them to target people with social media and dating apps.  The usual angle was to pull the mark along thinking they had someone wanting to meet them for a serious relationship and then switch to claiming there was some urgent need for money.  They've progressed from demanding wire transfers, and then gift cards, to setting up fake crypto investment accounts.  These criminals are not lone operators, they are organized criminal enterprises often with complex corporate-style teams that hand off the victims to specialists at each phase of the scam.  They'll even retarget victims who were previously tapped out with a "recovery scam", requesting even more money with the promise of getting back the stolen funds.

The usual angle I've seen going back to Manhunt and still very common on A4A, is the "army guy" who is just looking for someone to fall in love with and settle down as soon as they get back to the states.  They would follow a very rigid script, "For how long have you been on this site?"  "I'm currently deployed in <#Insert "name of country in active conflict">, but I am going back home soon".  They would often try to get you to move to another communication method quickly where I  the scam would progress to the next stage.  

A new angle has been the blind text messages where they pose as a "wrong number', "Hi Lisa, are we getting together Friday?"  "Lisa, this is Ana, don't tell me you forgot my number" "I'm sorry, my assistant must have put the wrong number in my contacts" "Thank you for being so understanding about this mix up, I hope we can be friends {#include "generic_asian_woman.gif"}". "What do you do?  I make sooo much money investing in crypto...."

The cruel fact is these criminals understand that we have a lot of people, often older, who are more isolated than ever and will easily fall for someone who flatters them and pays them attention.  Once they've claimed a victim they are ruthless in destroying their financial lives, and often their families and friends are unaware until the damage has been done.  The more people recognize the signs and understand how extensive these organizations are that perpetrate them the better.

https://www.fbi.gov/how-we-can-help-you/scams-and-safety/common-scams-and-crimes/romance-scams

 

 

 

 

[+ nycman]

LMAO. I thought we were talking about a good old fashioned farm friendly porcine slaughter too!

Unfortunately I’ve witnessed both forms of Pig Butchering first hand. 

I’d have to say the Mississippi/porcine one was more humane than the NYC/human one. 

An older wealthy friend had thankfully consented to giving me access to their online banking information after falling for several minor scams and getting their computer repeatedly hacked. A few months later, I was able to quickly identify "unusual" behavior on the account. Believe it or not, the person was furious with me for intervening. That is until we were in front of the bank officer who said, “the words you are looking for are ‘thank you’, he just saved you from getting wiped out." While the loss was significant it was only a minor dent in their overall wealth. In fact, the person’s heirs even called me to thank me. 

 This was after repeatedly having frank, face-to-face discussions about online scams and security. They STILL fell for it. And they were initially mad at me! Something very odd happens in our brains between 60 and 70 years old. So, if you’re near or past that age range, find someone younger whom you trust inherently, to help monitor your accounts. I know it feels intrusive, but it’s vitally important. No matter how many "safe guards" you set up with your bank, you will ALWAYS be able to override them. You need a smart, caring, compassionate person who loves you, looking out for you. It’s just a fact. 

I’ve already got my speech prepared for my one day financial minder…."$1,000 here, a $1,000 there, is just me being a dumbass and having fun. $10,000 is ok if I’ve already warned you I was about to knowingly do something stupid. More than that? Freeze the account and get my banker, accountant, and attorney involved. Something’s wrong."

[moonlight]

That's a good point nycman about how part of the problem is actual cognitive changes in the brain that often occur with age. Combine that with loneliness and people who were previously successful, smart, and shrewd in their careers can suddenly be susceptible to what are obvious scams to others. 

You better really trust that "financial minder" though not to be tempted to take advantage themselves. 

[+ purplekow]

I was told by an escort who has been discussed on this forum, that he had met a woman on line with whom he had developed a relationship/ This is a 40 year old very handsome bisexual man who had been an engineer before trying acting.  He said that she convinced him to invest in bitcoin.  Before he did so, she was going to send him information on it and he could try it out with fake funds to see how he would do with it.  He tried out the fake fund portion and not surprisingly he did extremely well.  At that point, she started urging him to invest, but the hand was overplayed and he realized it was a scam.  Crisis avoided.  So even relatively young, handsome, intelligent men can fall for someone who pushes the right buttons.  In his case, he believes he is very worldly and financially and tech savvy, and "she" was able to play into that and almost won the game.  This is the version I got from him, but who knows if his lesson came with a price or not.

Several years ago, I had a younger friend who was convinced to invest in private ATM and was telling me how well his investment was doing.  It sounded like a scam to me and I told him so numerous times.  He continued to be very positive about it for months and almost had me convinced that it was a real deal.  Then came the call from the FBI about his "investment" and the ATM scam that went with it.  He got about 30% of his money back, which was probably a win.

Ponzi schemes and other frauds are old as the hills.  If it sounds too good to be true, it is.  Of course I go back to receiving a hand written letter on air mail stationary about a poor unfortunate Nigerian prince who needed money to free up his frozen bank account worth millions.  He was desperate and had gotten my name from an unnamed mutual friend.  I felt bad for him but sadly for him, I was not investing in Nigerian prince scams at the time and I called the FBI.  They asked if I invested and when I said "no" they said there was nothing to do or to report.    I wonder if that prince of a fellow ever got his account unfrozen.  

Edited June 22 by purplekow

[Bargara Leatherboy]

This is very sad, its bad enough to fleece someone but for people to resort to suicide because they have been financially ruined is just dreadful.

 

Sadly these scams put crypto into a negative space.

 

For the record I have been scammed but Hopefully not again.  I am currently investing in the diversified space in crypto and blockchain, and finding it quite lucrative.

 

I am investing with people who I have known for many years who have moved from more traditional business to online - as part of moving money out of the regulated banking space into the unregulated space.

 

 

[samhexum]

Cryptocurrency ‘pig butchering’ scam wrecks Kansas bank, sends ex-CEO to prison for 24 years

 

The former CEO of a small Kansas bank was sentenced to more than 24 years in prison for looting the bank of $47 million — which he sent to cryptocurrency wallets controlled by scammers who had duped him in a “pig butchering” scheme that appealed to his greed, federal prosecutors said.

The massive embezzlement by ex-CEO Shan Hanes in a series of wire transfers over just eight weeks last year led to the collapse and FDIC takeover of Heartland Tri-State Bank in Elkhart, one of only five U.S. banks that failed in 2023.

Hanes, 53, also swindled funds from a local church and investment club — and a daughter’s college savings account — to transfer money, purportedly to buy cryptocurrency as the scammers insisted they needed more funds to unlock the supposed returns on his investments, according to records from U.S. District Court in Wichita, Kansas.

But Hanes never realized any profit and lost all of the money he stole as a result of the scam.

Judge John Broomes on Monday sentenced Hanes to 293 months in prison — 29 months more than what prosecutors requested after he pleaded guilty in May to a single count of embezzlement by a bank officer.

During the sentencing hearing, “I called his actions ‘pure evil,’” said Brian Mitchell, who for years was Hanes’ next-door neighbor in Elkhart, a town of 2,000 or so people in southwestern Kansas, north of the Oklahoma panhandle.

Mitchell, whose farm and movie theater chain businesses banked at Heartland Tri-State, said there were around 30 shareholders in the bank who attended Hanes’ sentencing, more than a year after their stock value was wiped out in the failure.

“There were people who lost 70, 80% of their retirement” as a result of Hanes’ actions, Mitchell told CNBC on Wednesday in a phone interview.

One local woman is “struggling to afford a nursing home” for her 93-year-old mother, while another woman “can’t retire” now because of the crime, Mitchell said.

Mitchell, who was not a shareholder but who belonged to the investment club victimized by the CEO, said Hanes showed little, if any, remorse for his actions, despite hearing victims tell the judge about the effects of his crime.

“Shan was facing the judge, and he just looked over his left shoulder for a second, and didn’t make eye contact, and said, ‘Sorry,’” Mitchell recalled, describing the scene in the courtroom. “And that was it.”

But Hanes had a look of “absolute shock” on his face when Broomes imposed the stiff sentence and ordered the former bank chief taken into custody immediately, Mitchell said.

Mitchell said that for years he considered Hanes a “good guy,” who like other people in Elkhart pitched in to help others in the small community when they needed help, and preached at his local church. Hanes also testified several times before Congress about community banking.

But prosecutors and bank regulators said that Hanes, who has three daughters with his school teacher wife, began stealing after being targeted in a pig-butchering scheme in late 2022.

That scheme was described in a court filing as “a scammer convincing a victim (a pig) to invest in supposedly legitimate virtual currency investment opportunities and then steals the victim’s money — butchering the pig.”

Hanes, who had served on the board of the American Bankers Association, and been chairman of the Kansas Bankers Association, in December 2022 began making transactions to buy cryptocurrency, which “appeared to be precipitated by communication with an unidentified co-conspirator on the electronic messaging app ‘WhatsApp,’” prosecutors wrote in a court filing.

“To date, the true identity of the co-conspirator, or conspirators, remain unknown,” the filing notes.

Hanes initially used personal funds to buy crypto, but in early 2023 he stole $40,000 from Elkhart Church of Christ and $10,000 from the Santa Fe Investment Club, according to prosecutors and a defense filing.

He also used $60,000 taken from a daughter’s college fund, and nearly $1 million in stock from the Elkhart Financial Corporation, his lawyer said in a filing.

In May 2023, he began to make wire transfers from Heartland Tri-State Bank to accounts controlled by scammers, at first with a $5,000 transfer.

Two weeks later, on May 30, Hanes wired $1.5 million and a day after that, he sent another transfer of the same amount the following day, filings show.

Three days later he directed two wire transfers totaling $6.7 million to be sent by the bank to the crypto wallet, and a whopping $10 million less than two weeks later, and another $3.3 million days afterward.

Hanes told bank employees to execute the wire transfers, and “made many misrepresentations to various people” to get access to the funds so they could be transferred, prosecutors wrote. Heartland Tri-State employees circumvented the bank’s own wire policy and daily limits to approve Hanes’ wire transfers, according to a report by the Office of the Inspector General of the Board of Governors of the Federal Reserve System.

“We believe that the CEO’s dominant role in the bank and prominent role in the community contributed to a reluctance on the part of Heartland employees to question or report the alleged fraudulent activities earlier,” that report said.

Prosecutors wrote that the series of 11 wire transfers from Hanes to the scammer “illustrate a common pattern” in pig-butchering schemes.

“First, there is an initial ‘investment’ followed by another transaction required to secure or guarantee those funds,” prosecutors wrote. “Further ‘investments’ may be made, but always require another need for funds, to guarantee or unfreeze the earlier transfers. This pattern is clearly represented in the defendant’s embezzlement.”

Mitchell confirmed that to CNBC, saying that he got a call from Hanes at 7:40 a.m. on July 5, 2023.

“He said, ‘Brian, I need your help, and you’re the only guy who can help me,’” Mitchell recounted.

Mitchell, who had survived prostate cancer two decades ago, said he thought Hanes was calling him to say that he had the same type of cancer.

But when Mitchell showed up at Heartland Tri-State to meet Hanes, before the bank had officially opened to customers that morning, the CEO told him something much different — and stranger.

“The first thing he says is, ‘Brian, I need to borrow $12 million for ten days, and I’ll give you $1 million for loaning it to me,’” Mitchell recalled. “I’m sitting there and I said, am I in a bank in Elkhart, Kansas, or in an alley with a loan shark in Chicago.”

When he asked Hanes what he wanted the money for, Hanes “pulls out his phone and acts like he’s logging in and he shows me this account that has $40 million, $42 million,” Mitchell said. “He said, ‘Brian, I’ve got this money and it’s in cryptocurrency, and I need $12 million to help verify the funds.’”

Hanes then hold him he had been in touch with a banker in Denver named “Jim” and “another guy in Oklahoma” and they had invested in crypto held in Coinbase accounts, where they had made a lot of money, Mitchell said.

“I told him, ‘You’re in a scam, dude. You’re in a scam,’” Mitchell said. “I stopped him and said, ‘Is this bank money you’re playing with?’ And he said, ‘No, Brian.’”

Hanes kept telling him he needed the $12 million to “activate” the funds he had already transferred to the crypto account, which he said was in Hong Kong, Mitchell recalled.

“I said, ‘Get on a plane, go to Hong Kong, hire an interpreter, and go get a bank check’” for the funds supposedly held there, Mitchell said. “Then I said, ‘I’m not going to loan you the money.’ I said, ‘You’re in a scam, walk away.’”

But later that same day, after Mitchell rebuffed his entreaties, Hanes had bank employees wire $8 million to the scammers’ accounts, prosecutors said in a court filing.

Two days after that, Hanes had employees wire the scammers another $4.4 million.

In the meantime, Mitchell, who was unaware of those transfers during that period, said that after meeting with the CEO he was worried that Hanes would get access to customers’ deposits at the bank and transfer the $12 million that he had asked for.

“We kept checking our lines of credit,” Mitchell said.

“The next week, I was in the bank, and one of the employees caught me, she just looked so stressed,” Mitchell said. The woman told him that Hanes had wired money out of the bank.

“I said, ‘Don’t say another word to me... I’ve got to talk to a board member,’” Mitchell said.

“And I talked to a board member that night, and he went to talk to an attorney that night,” Mitchell recalled.

Hanes was fired within days.

About two weeks later, on July 28, 2023, Heartland Tri-State was closed by the Kansas Office of the State Bank Commissioner was taken over by the Federal Deposit Insurance Corp.

Shareholders were wiped out, but depositors did not lose any money, as Dream First Bank, National Association, of Syracuse, Kansas, assumed all deposits.

Heartland Tri-State, had nearly $140 million in total assets and $130 million in total deposits as of the prior March.

Word quickly spread that a scam had led to the bank’s failure.

But Hanes remained uncharged until last February, when he was charged by federal prosecutors with embezzlement. He was separately charged in Morton County, Kansas, state court by the county attorney in a 28-count complaint related to looting the bank.

Hanes was under house arrest until his sentencing in federal court this week.

“I talked to him last month when he was out mowing his yard,” Mitchell said.

Hanes, who had traveled at one point to Perth, Australia while being scammed to try to recover the funds he transferred, told Mitchell that he believed there had been a way to recover the money up to the point he was arrested.

“He said ... ‘If I just had another two months I could get the money back,’” Mitchell recalled.

Mitchell said that at Hanes’ sentencing, Judge Broomes asked Hanes several questions about his actions, but, “He didn’t really have any good answers.”

Broomes later looked at the victims in the courtroom’s gallery before announcing Hanes’ sentence.

“He said ... ‘I want you to forgive Shan. I know that he’s hurt you, I know this, but I want you to move on, and I want you to find some joy in your life. Let me discipline him,’” Mitchell recalled.

Broomes also told Hanes that although several people had noted how intelligent the former CEO was, “If you were that intelligent you would have stopped this,” Mitchell recounted.

Hanes’ lawyer John Stang, who did not respond to a request for comment, in a sentencing submission wrote, “Mr. Hanes made some very bad choices after being caught up in an extremely well-run cryptocurrency scam.”

“He was the pig that was butchered,” Stang wrote. “Mr. Hanes’s vulnerability to the Pig Butcher scheme caused him to make some very bad decisions, for which he is truly sorry for causing damage to the bank and loss to the Stockholders.”

Kansas U.S. Attorney Kate Brubacher, in a statement, said, “Hanes’ greed knew no bounds. He trespassed his professional obligations, his personal relationships, and federal law.”

“Not only did Shan Hanes betray Heartland Bank and its investors, but his illegal schemes also jeopardized confidence in financial institutions,” Brubacher said.

https://www.aol.com/news/cryptocurrency-pig-butchering-scam-wrecks-202959513.html

[samhexum]

“Pig-butchering” scams cost Americans billions. This lawyer is taking them on.
Prosecutor Erin West has been one of the few to have any success against the criminals 

Read in The Wall Street Journal: https://apple.news/AlV5WmaD_TqCN2eDUBd23CA