Magazine|The Cryptocurrency Scam That Turned a Small Town Against Itself
https://www.nytimes.com/2025/02/19/magazine/cryptocurrency-scam-kansas-heartland-bank.html
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Jim Tucker could hardly believe what he was hearing. It sounded like fiction, a nightmare too outlandish for an unassuming town like his.
Listen to this article with reporter commentary
It was July 2023, and Tucker was hosting a meeting of the board of Heartland Tri-State Bank, a community-owned business in a small Kansas town called Elkhart. Heartland was a beloved local institution and a source of Tucker family pride: Jim served on the board with his elderly father, Bill, who founded the bank four decades earlier. All the board members — the Tuckers and several other farmers and businesspeople — had known one another for years.
That evening, however, they were gathering to discuss what seemed, on its face, an epic betrayal. Over the past few weeks, the bank’s longtime president, a popular local businessman named Shan Hanes, had ordered a series of unexplained wire transfers that drained tens of millions of dollars from the bank. Hanes converted the funds
12 Comments
vanc_cefepime
https://archive.is/uLKnj
onlyrealcuzzo
This wasn't a sophisticated attack – Pig Butchering: https://en.wikipedia.org/wiki/Pig_butchering_scam.
The scammers promised him outrageous returns, and he kept giving them more and more money – without ever actually seeing any real returns.
One has to wonder how this bank ever managed to be successful before.
With all the fraud and scams in the world – how did no one find this guy sooner?
edm0nd
[flagged]
Analemma_
Cryptocurrency is so completely run-through with scams, top to bottom, that frankly it needs to become a criminal violation of fiduciary duty to go anywhere near it if you are managing other people's money (and they have not explicitly consented to invest in crypto stuff). Do you manage a bank, and you touch crypto? Arrested. Do you manage a pension fund, and you touch crypto? Arrested. Are you in charge of a trust, or in some other way a caretaker of someone else's money, and you touch crypto? Arrested.
This needs to be done loudly and often to make it very clear to everyone involved in the business of managing others' money that they should treat everything even remotely cryptocurrency-related as radioactive.
jmuguy
Sounds like this was bound to happen sooner or later. Why was this fool allowed to wire that much money out of the bank – he was only caught when he asked someone outside of the bank to literally give him 12 million dollars.
fallinditch
This story is featured in episode 1 of the Scam Inc podcast series from The Economist. Pig butchering scamming is a huge business, well worth a listen.
https://www.economist.com/audio/podcasts/scam-inc
renewiltord
What a moron. This explains why private equity is so successful. Small town businesses are good businesses but they’re often run by morons who inherited their stuff. Once you buy them out you can drive costs down and be efficient and just not send your money to Nigerian princes.
xenago
There was nothing stopping a gullible manager from just … transferring all the money away? uh
fallinditch
This is why you get so many unknown number calls and texts. Best not to answer or reply.
Back in 99/00 a friend of mine received the 'I am a Nigerian prince' email. This scam was very new at the time and neither of us had seen anything like it before. My friend was believing and accepted it as a good money making opportunity, whereas I was instantly 'this is so obviously some kind of dodgy thing'. Luckily I was able to persuade him to not follow up.
Jimmc414
While Hanes's actions were criminal, another big story is about systemic failures in their banking controls and how they contributed to this failure:
Board allowed a single individual to wire tens of millions without additional approvals
No automated systems flagged the unusual transaction patterns
Previous red flags from Hanes's 2011 firing for questionable loans didn't lead to enhanced oversight
Board continued considering his requests for more money ($18M) even after learning of the initial theft
Reliance on personal trust and reputation substituted for proper institutional controls
No separation of duties or multi-party approval requirements for large transfers
Community banks need strong governance regardless of size or personal trust relationships.
jrochkind1
Previously discussed around coverage around Hane's sentancing 6 months ago.
https://news.ycombinator.com/item?id=41314542
j_timberlake
The lesson here isn't "don't fall for scams", that's obvious, and it just takes a more sophisticated set of lies to trick smarter people out of their money (Enron + Arthur Anderson).
The real lesson is "don't use other people's money for your own schemes", which is exactly how he got rich to begin with. Banking taught him the opposite lesson for years. And voters couldn't care less about primary'ing politicians for banking regulation even after the mortgage crisis, so it will never, ever stop.