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A tight-knit Kansas community abruptly collapsed after an 'upstanding' man, whom residents had trusted for decades, became intertwined in a cryptocurrency scam and lost $47million of his own neighbors savings.
Shan Hanes, 53, was sentenced to 24 years and five months behind bars in August 2024 for embezzling $47.1million to purchase crypto - an act that led to the demise of a respected bank and the destruction of the long-time trust built within the small town of Elkhart.
'I've tried to reconcile this in my head,' Brian Mitchell, an Elkhart resident and business owner, told the Kansas Reflector.
'The damage that has been done to my town, I can only describe in two words: pure evil.'
Now that the damage is done, the reasoning behind how - and why - the sophisticated banker and community leader was able to betray a town bound by deep ties of friends, family and trust remains a mystery.
'People need to know what occurred,' Mitchell told the Kansas Reflector. 'There was a turning point when the victim became the thief.'
The remote town of Elkhart is home to roughly 1,900 agriculturally-adapt people who spend their days tending to the rows and rows of crops that lie across the 108,000-acres of prairie.
At the heart of the farming community is Heartland Tri-State Bank - a bank founded in 1984 by a group of men. Among the group was a man named Bill Tucker, The New York Times reported.
The group had an alternative plan for their bank that would differentiate them from another one in the area - one that they felt made acquiring loans much too difficult.
From there, Heartland was born - quickly becoming the center of pride within the community even after it was taken over by Kansas Bank Corporation, a holding company, back in the early 1990s.
Around that same time, Hanes, who was originally from Oklahoma, came to Elkhart to begin his career as a loan officer for the bank.
It wasn't long before he proved himself to be both a finance machine and a true community leader. Eventually, he was named the new president of Heartland in 2008.
Hanes immediately became the epitome of small town charm - he was a part-time preacher at a local church, lived in a nice house with his wife and three daughters and frequently volunteered at high school football games.
Despite Bill Tucker referring to the up-and-coming success story as a 'brilliant executive', the leaders of the Kansas Bank Corporation became suspicious of Hanes just three years after his presidential promotion.
Tina Call, a woman who served on the board at the time, told the Times that the company was concerned after they discovered problems within Hanes' loan portfolio - paperwork that didn't add up and borrowers who didn't seem to have collateral for their loans.
He was eventually fired from Heartland. His lawyer claimed that he was simply a victim of downsizing - an explanation Call called 'completely false'.
However, in 2012, Hanes returned to Heartland as president. At this time, the bank adopted a common ownership style similar to thousands of other banks across the country - it was controlled by a group of local investors.
Among the 35 investors was Hanes and his wife, along with Bill Tucker and his son, Jim. The newly-adopted structure of Heartland meant that no other entity outside of Elkhart could control the bank's future. It also meant that all profits would flow right into the town.
Under Hanes leadership, the bank generated reliable dividends for years as shareholders invested in their farms, saved for retirement and secured nursing-home care for their aging relatives, the Times reported.
Heartland remained as a trusted stability for the tight-knit town. Hanes too seemed to understand the importance of community bonds within a town as desolate as Elkhart.
In 2016, Hanes even testified at a banking hearing where he described Elkhart as an old-fashioned community built simply on trust, the Times reported.
It was at the US House of Representatives where he also revealed that staff members of the bank would wake up to cash sitting in their unlocked trucks - a testament to how confident residents were in knowing their money would end up in the right place.
'This is what it means to be a community rural banker,' Hanes declared at the hearing.
The popularity of cryptocurrency was also growing at this time as it became more mainstream through crypto proponents who envisioned a fully online form of exchange.
Yet Elkhart was the polar opposite of what crypto entailed. Fully automated exchanges meant no middle men, no bankers, no trust - just computer code.
Hanes himself was even against the recently growing form of digital currencies. He once told a coworker that those who used crypto 'must have something they are trying to hide', the Times reported.
It wasn't until years later, when Hanes received a message on social media from a woman who went by the name Bella, that things began to take a sinister turn.
In December 2022, Bella introduced the businessman to cryptocurrency where he began purchasing some for himself.
Bella, who claimed that her aunt ran one of the firms back in Australia, showed Hanes a website that appeared to be similar to a crypto investment platform. From that point on, the pair frequently contacted through WhatsApp.
Although Hanes was wealthy, his investments required extra funds - funds that he didn't have. Just months later, he had already taken money from his daughter's college fund and spent $60,000 on digital currency.
Hanes began stealing from his local investment club, his church and eventually from the bank after he had drained his own personal savings within no time.
Under the assumption that he was helping a client, Hanes ordered a series of wire transfers adding up to $3million from Heartland over the next few weeks - except the money wasn't used to help a friendly neighbor.
The $3million was ultimately transferred from Heartland to an account linked to Kraken, a company offering trading in crypto.
Hanes then directed Heartland to borrow nearly $21million of additional funds from a network of lenders while also transferring a similar amount using a credit line the bank kept active with another institution.
By the end of June, Hanes had sent $31million of the stolen funds to his account on Kraken.
On July 5, Mitchell received a text message from Hanes claiming he needed help.
He was also a successful man in town. He was a farmer and a veteran businessman who owned a chain of movie theaters - one of which standing just one block from the bank.
Yet the farmer never played a role within the bank, but he knew Hanes to be a long-time friend and neighbor. Therefore, he didn't decline the request.
Confused at what Hanes could need - advice about a medical problem perhaps? - Mitchell walked into the bank that morning, unsure what to expect.
It is safe to say he was floored when Hanes instead asked for $12million.
'It was surreal,' Mitchell told the Times. 'Like, OK, am I in a loan office in Elkhart, or am I in a back alley in Chicago with a loan shark?'
The story he gave Mitchell was nothing less than confusing. Hanes claimed that there was an issue with a wire transfer from a Hong Kong bank - a bank where he and his partners moved the funds because the platform charged lower fees - and his money was now stuck. The only way to unfreeze it was to send more.
'He showed me this app on his phone,' Mitchell told Kansas Reflector. 'There was a balance of some $40million in his account, but he needed another $12million to access it.'
Wondering what his friend could've possibly got himself into, Mitchell knew that he didn't want to send millions to a crypto operation across the world. Instead, he told Hanes to hire an interpreter, get a cashier's check and head off to Hong Kong.
'Shan, I think you're in a scam,' Mitchell said after Hanes went silent after his suggestion.
Hanes still made an $8million wire transfer that very same day using bank funds. But in a town as remote as Elkhart, news finds a way of getting around - quickly.
A troubled Mitchell got into contact with some people at Heartland where he alerted them of what had just happened.
Within weeks, the board held a crisis meeting demanding an explanation, but it was clear that the bank was caught up in some sort of scam by the time they had gathered.
Nonchalantly, Hanes apologized at the meeting and promised that he could fix the issue and recover the money - a total of $47.1million.
In order to fix the disaster, Hanes claimed that all he needed was the board's approval to borrow an additional $18million. Those funds, he said, would go to some of his business contacts that would recoup the millions that had vanished.
Jim Tucker glared around the room, nervous at who may believe Hanes' far-fetched explanations. He saw that his 92-year-old father was intently listening - trying to find a way to believe the man he had trusted for years.
Ultimately, Hanes thought he perfectly executed his pitch. He showed up to a secondary meeting the next morning in shorts and flip-flops and began handing out paperwork which outlined the ways Heartland could borrow more money.
Jim, however, slid the paperwork right back to Hanes.
'Shan, I don't even know who you are right now,' Jim said, according to the Times. 'I don't believe anything you've said.'
By the end of July, the years-long community bank was in turmoil. The Kansas banking regulator examined Heartland's accounts where the damage was clear as day - Heartland was completely bankrupt.
Cargo vans and black SUV's surrounded the bank on July 28 of 2023, where David Herndon, the Kansas banking commissioner, told the staff members gathered around the lobby that Heartland would shut down.
Herndon informed them that the bank would open under a new owner - Dream First - a company located just a couple of counties away. Ultimately, he said, none of the residents would lose their deposits as they would just move over to the new company.
Yet the shares in the bank's holding company were now worthless - destroying years of investments. Many of Heartland's shareholders lost the bulk of their savings, which included things such as emergency and retirement funds.
Just how devastating the ruthless scam was for the community was evident on the day of Heartland's closure. Jim Tucker had helped an elderly man find the signature line that dissolved a business his family had started in 1984.
'It was probably one of the hardest things I've ever had to do,' Jim told the Times. 'We still don't understand why. We didn't understand what happened.'
The Tucker's themselves lost $1.4million worth of shares - a source of wealth that Jim had hoped to leave behind to his children.
Jim and his father listened to the president of Dream First give a pep-talk to the staff of Heartland, telling them that 'if you can dream it, we can achieve it.' Just feet away, two young women were crying at the teller's counter.
In a matter of a second, the long-running bank was ripped away. The building was full of government officials carrying step-stools, ladders and power tools as they disconnected Heartland's security system and removed the cameras.
Laptops and computers were taken out of offices and carried out the doors before they were piled up into the cars parked just outside.
'Just watching it melt,' Jim recalled to the Times. 'Burn to the ground, right there before our eyes.'
Elkhart was left in a state of complete fear and confusion as to what just happened. The only thing people could agree on was that the money was gone.
It was clear that Hanes was initially the victim of a 'pig butchering' scam - a translation used in China to describe the process. The victim, who is referred to as the pig, is slowly fattened up by the scammer before slaughter.
A federal investigator explained that the wire transfers Hanes made out of Heartland 'spider-webbed' into several untraceable crypto wallets, according to the Times.
'There is no indication that anyone knows where it is at this point, or how to even access it,' the investigator said.
In May 2023, Hanes entered a guilty plea to a single count of embezzlement by a bank officer - a crime punishable by up to 30 years in prison.
By the time sentencing came around in August, victims of the scam traveled to the Wichita Courthouse to stand before both Judge John Wesley Broomes and Hanes to share their stories of unimaginable loss and destroyed trust.
Some said that the economic damage done will take generations to heal. Others spoke of their stolen retirement funds, the burden of having to care for aging parents and their changed relationship in both faith and community, the Kansas Reflector reported.
'Thirty years of working in adjacent offices did not prepare me for the level of deceit,' Moe Houtz, a bank officer, wrote in a statement read by Mitchell.
'My creator says I have to forgive,' Marla Harris, a Heartland investor, said. 'I'm not ready to forgive you, Shan, but I have to. You put me in a place of having to deal with my God for something I didn't do.'
'I'd just like to know why Shan would do this,' Dan Smith, a former VP of the bank, said. 'For whatever reason, you burned it to the ground.'
'The burden of trust,' Smith added. 'Greed and arrogance do not know these burdens.'
'News crews and journalists have cast a negative light on the community,' Jim Tucker, whose family held 8,602 shares of Heartland, said. 'My family's dreams have been wiped out.'
'There's no reward that would have been worth the risk you took,' Patrick Overpeck, another investor, told Hanes directly. 'The only thing we're guilty of is that we trusted that man too much.'
Another said: 'If he is released the day he dies, that will be one day too early.'
The Elkhart Church of Christ, where Hanes occasionally officiated funerals, ended up closing. The small congregation found it too difficult to overcome the scandal.
The Santa Fe Trail Investment Club, another victim of Hanes, also disbanded when all was said and done.
No Elkhart residents stood up in support of Hanes once it was his turn to speak in the packed-out courtroom.
'I had no intention of ever causing the harm that I did,' he said in a weak voice. He acknowledged that his family - his wife and three grown daughters - will deal with his actions for the rest of their lives.
'To the shareholders, they were my friends and family, too,' he added while glaring over his shoulder and throwing out an additional 'sorry.'
Hanes continued to ramble as he spoke of his wish for others to understand his intent. But the judge snapped back, responding that he hadn't heard anything so far during his explanation that would help him understand, The Kansas Reflector reported.
The judge then shifted his attention to the victims, where he said: 'This is one of the most difficult cases I've had to deal with except child pornography in terms of victim impact.
'My suggestion to you is to try to forgive this man. If you set him free, you set yourselves free. He's already taken enough from you.'
The judge then addressed Hanes, where he noted how his conduct has injured the community 'in a way that's not easily captured with words'.
Broomes handed down a sentence of 293 months - more than 24 years, which is more than the prosecution had even asked for.
The businessman-turned-criminal also faces another seven years in prison if he is convicted of state charges filed in the case - potentially making him 76 upon his release.
In October 2023, an FBI investigator called Jim to let him know that the department had recovered $8million of the stolen funds after finding them hidden in an account.
His father, who was one of Heartland's founders, was in and out of the hospital at the time. Jim went to disclose the news, to which Bill replied: 'Oh, my.' He died a week later.
In January 2024, Hanes told the court that he had made a last-ditch attempt at getting back the money by flying to Australia where some of his business partners, including Bella, were based, the Times reported.
He was in touch with them until he landed at the airport, he said, and had only accepted he was tricked months after the bank collapsed.
'I'll forever struggle understanding how I was duped,' Hanes said. 'I should have caught it, but I didn't.'
Pig butchering scams are typically run by organized criminal gangs in southeast Asia, who use modern technology to lure easy money.
According to the New York Times, crypto fraud cost American investors nearly $4.8billion in 2023. They typically begin with messages from unknown numbers and people through LinkedIn, Facebook or WhatsApp.
Everyone who knew Hanes formally described him as nothing other than influential and honest - an endearing man to the community.
'On the surface, Shan Hanes was an upstanding and very involved member of our community,' Jim Tucker told the Times.
'Now we're all left to wonder how sincere any of that ever was.'
Although Hanes is behind bars, residents of Elkhart are still searching for any answers or explanations that make sense. They are trying to relish in the fact that their 'deep' community ties are weaker than they had ever imagined.
The tiny farming town surrounded by land in the middle of nowhere had once considered isolation part of its charm - everyone knew everyone, people prayed together and relied on each other.
Now, it only serves as a reminder of the ultimate betrayal which spanned across the globe.
'The trust that was broken,' Jim told the Times. 'That one stings.
