Scams come in all different shapes and sizes, but one technique is particularly frightening, and it’s called “slaughtering pigs“, which involves an individual spending a long time developing a relationship with their victim only to end up providing them with a “business” opportunity that ruins them financially.
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This is perhaps one of the cruelest forms of deceiving someone as it involves building trust with a person through a perceived genuine relationship. Unbeknownst to the victim, that trust is broken after the fraudster makes off with their money. Shan Hanes, 53, former CEO of Heartland Tri-State Bank in Elkhart, Kans., fell for this type of scam and was sentenced to 24 years in prison for illegally transferring $47.1 million, which led to the bank’s bankruptcy.
The eleven transactions that Hanes made between May and July 2023 resulted in a loss of $9 million from the bank’s investors, forcing the Federal Deposit Insurance Corporation (FDIC) to absorb the $47 million loss and seize the bank. Some of the bank’s clients lost almost all of their pension funds, which was amusing to Hanes, who lost all of his embezzlement money.
“Mr. Hanes, as CEO of Heartland Tri-State Bank, enjoyed the trust of the community of Elkhart, KS, but he violated that trust. He tried to benefit himself financially by misappropriating funds from the bank. His get-rich-quick scheme was really a pig-slaughtering scheme. His involvement in this scheme ultimately led to the collapse of the bank. His job, the bank’s job, was to protect its customers and identify fraudulent scams – not to participate in them,said Special Agent in Charge Stephen Cyrus of the FBI’s Kansas City Field Office
So how did this happen? The pig slaughter scheme works by securing an initial investment from a victim and is then followed by multiple requests for additional funds to “secure” or “warranty” the previous investments will pay off. That would mean “slaughter” scheme phase.
In Hanes’ situation, the former bank executive initially invested thousands with his own money. He then eventually began stealing from local organizations and his daughters’ college fund. In the end, this resulted in nearly $50 million being transferred from the bank, even though Hannes was warned that he was being defrauded.