Heartland Tri-State Bank was the financial backbone of Elkhart, Kansas, a town of just 1,900 people where trust was everything. That trust collapsed in July 2023 when bank president Shan Hanes funneled $47.1 million into crypto, only for it to vanish into overseas wallets. The bank collapsed. The town was left in financial ruin. And residents are still searching for answers.
State and federal investigators say Hanes fell victim to an elaborate crypto scam, often called pig butchering, where victims are manipulated into pouring money into fake investments until there’s nothing left. But this wasn’t just Hanes’ personal downfall—it took down an entire town’s financial security.
Bank president stole millions to chase crypto riches
Hanes, a respected businessman and part-time preacher, had been running Heartland since 2008. The bank was community-owned, with about 35 local investors, including Hanes and farmer Jim Tucker, whose father helped found Heartland in 1984. No one outside of Elkhart controlled it, and profits stayed within the town.
That changed in December 2022, when a woman calling herself Bella messaged Hanes on social media. She told him her aunt ran a crypto investment firm in Australia and convinced him to start investing. By May 2023, Hanes had already drained his personal savings, taking $60,000 from his daughter’s college fund. It still wasn’t enough.
The scam escalated. Hanes started stealing from the bank. On May 11, 2023, he wired $3 million from Heartland’s accounts to Kraken, a U.S.-based crypto exchange. By June 2023, he had funneled $31 million from the bank into his crypto portfolio. He told colleagues the money was for a client, but the transfers had no oversight, no approvals, no documentation.
When an investor close to Hanes tipped Tucker off, he confronted him at a July board meeting. Hanes, wearing his usual salesman-like confidence, said he had a plan. He just needed the board to approve a loan for $18 million to “recover the money.”
“Shan, I don’t even know who you are right now,” Tucker told him. “I don’t believe anything you’ve said.”
By then, it was already too late.
Regulators shut down Heartland, FBI investigates
Word spread quickly. Brian Mitchell, a local businessman, was one of the first outside the bank to hear the story. Hanes had approached him, asking for $12 million to help unfreeze his so-called $40 million in crypto holdings on an offshore trading platform. Mitchell refused.
“Shan, I think you’re in a scam,” he told him. Hanes wasn’t listening. That same day, he wired another $8 million.
By the end of July 2023, Kansas state regulators were inside Heartland’s offices. The bank was insolvent. On July 28, the Kansas banking commissioner, David Herndon, stood in the lobby of Heartland and told employees it was over.
A new bank, Dream First, would take over accounts on Monday morning. Depositors were protected, but investors lost everything. Bank shares became worthless overnight. Retirement funds, life savings, generational wealth—gone.
That same day, agents removed security cameras, dismantled computers, and loaded them into black SUVs parked outside. Federal officials told shareholders the money had disappeared into untraceable crypto wallets.
The collapse devastated Elkhart. Two tellers wept openly at their desks as officials shut the bank down. Tucker’s father, who had spent his life building the bank, had to sign the documents that officially ended it.
“Just watching it melt,” Tucker said later. “Burn to the ground, right there before our eyes.”
Hanes sentenced to 24 years in federal prison
The case moved quickly. Hanes pleaded guilty to embezzlement and was sentenced in August 2024. At the federal courthouse in Wichita, Heartland’s former shareholders sat in the gallery, waiting for the judge’s decision.
Hanes’ defense attorney, John Stang, said his client had been manipulated. “I keep hearing the question why,” Stang told the judge. “Was it greed? Was it being gullible? Apparently, he wasn’t intelligent enough.”
Hanes himself spoke, his voice shaking. “I’ll forever struggle understanding how I was duped,” he told the court. He admitted he had even traveled to Australia in January 2024, still believing he could get the money back. No one met him at the airport.
Judge John W. Broomes wasn’t sympathetic. “The best thing for you is to forgive this man,” he told the shareholders. “Leave matters of retribution to me. That’s my job, and I’ll see that it’s done.”
Then he sentenced Hanes to 24 years and 5 months in federal prison—longer than prosecutors had requested.
A ripple of quiet yeses moved through the courtroom. Hanes’ sister and daughter sobbed as he was led away in handcuffs.
One shareholder stood up and spoke. “If he is released the day he dies, that will be one day too early.”
The morning Heartland Tri-State Bank shut down, Tucker and his father stood in the lobby, watching everything they had built disappear. Just an hour earlier, Tucker had helped his father sign the government paperwork that officially ended their family’s 40-year-old business.
“It was probably one of the hardest things I’ve ever had to do,” Tucker said. “We still didn’t understand why. We didn’t understand what happened.”
The Tuckers lost $1.4 million in shares—wealth Jim Tucker had planned to pass down to his children. As they stood in silence, the new bank’s president tried to rally the remaining employees with a speech: “If you dream it, we can help you achieve it.” Across the room, two young tellers broke down in tears.
The building filled with unfamiliar faces—government officials overseeing the closure. Some carried step stools, power tools, and ladders. They moved furniture, disabled security cameras, and ripped out the bank’s computers. Laptops and hard drives were hauled out to cars parked outside.
Jim and Tucker watched everything unfold.
“Just watching it melt,” Jim said. “Burn to the ground, right there before our eyes.”
The collapse of Heartland shook the entire town of Elkhart. Nobody could explain where the money had gone, but everyone knew it wasn’t coming back.
A crypto scam with no traceable end
Federal investigators later revealed that Heartland’s missing money had been wired into an untraceable web of crypto wallets. “There is no indication that anyone knows where it is at this point, or how to access it,” a federal agent told the court.
But some clues surfaced on the blockchain. Crypto forensics firm Chainalysis found that at least some of the stolen money may have ended up in the hands of a Southeast Asian crime ring.
Investigators linked Heartland’s stolen funds to an eerily similar scam from 2023. In that case, a wealthy Minnesotan lost over $9 million after being targeted by a crypto fraud ring. His scammer approached him on LinkedIn, urged him to invest—and even convinced him to leave his wife.
The question nobody in Elkhart can answer
Despite all the evidence, nobody can explain why Shan Hanes did it. For decades, Hanes had been a respected banker, a pillar of the community. People trusted him with their life savings.
Tucker still doesn’t get it. “On the surface, Shan Hanes was an upstanding and very involved member of our community,” he told the judge. “Now we’re all left to wonder how sincere any of that ever was.”
Hanes spoke publicly for the first time in a Wichita courtroom, facing former friends and colleagues.
“I’m sorry,” he told the judge. He claimed he truly believed he was part of a legitimate investment. Even after the bank collapsed, he thought he could get the money back.
In January 2024, he flew to Perth, Australia, chasing after the people he thought were his business partners. The moment he landed, they cut contact. That was when it hit him.
“I’ll forever struggle to understand how I was duped,” Hanes admitted. “I should have caught it, but I didn’t.”
When Hanes finished, Judge John Broomes leaned back in his chair, looking at the devastated shareholders.
“The best thing for you is to forgive this man,” he told them. “Leave matters of retribution to me. That’s my job, and I’ll see that it’s done.”
Then he sentenced Hanes to 24 years and 5 months in prison—a harsher sentence than even the federal prosecutors had asked for.
A chorus of yeses echoed from the shareholders.
Elkhart still reeling, town trust destroyed
Months later, investigators recovered $8 million hidden in Tether, a popular stablecoin. It was a tiny fraction of the stolen money, but it was enough to partially reimburse investors.
When Tucker heard the news, he rushed to his father’s hospital bed. The old man, too weak to speak much, simply blinked. “Oh, my,” he said softly. He died a week later.
Elkhart has not moved on. The Heartland building still stands, but its sign has been stripped away. The new owner hasn’t replaced it. It’s just an empty brick facade, a symbol of what the town lost.
Hanes may have been a victim of crypto fraud, but his victims were his own neighbors. Many lost everything.
Tucker still drives past the bank, still thinking about what happened.
“The trust that was broken,” he says, his voice trailing off. “That one stings.”
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