The former chief executive officer (CEO) of a US bank has been sentenced to more than 24 years in federal prison for embezzling $47 million in a cryptocurrency fraud scheme. CNBCFormer Heartland Tri-State Bank CEO Shaun Haynes became embroiled in a “pig baiting” scam in which he bought crypto “to unlock alleged returns on his investments” that he never received. The 53-year-old schemed a series of wire transfers over just eight weeks last year that led to the collapse of Heartland Tri-State Bank and the Federal Deposit Insurance Corporation (FDIC) taking over Heartland Tri-State Bank in Elkhart, one of only five U.S. banks slated to fail by 2023.
Pig baiting scams have become increasingly common in recent years. The scam typically involves a scammer finding and contacting a victim via messaging apps, dating apps, or social media platforms. They then attempt to build a relationship with their victim and then trick them into a series of crypto investments.
according to CNBCFrom May to June 2023, Mr. Hance made a series of wire transfers using the bank’s funds. He also embezzled money from a local church, an investment club, and his daughter’s college savings account. The scammers reportedly tricked him into buying cryptocurrencies, insisting that he needed more money to unlock the supposed returns on his investments. However, the 53-year-old never received any profits, and lost all of the money he had stolen as a result of the scam.
Last week, U.S. District Judge John Broomes sentenced Mr. Haynes to 24 years in prison — 29 months more than prosecutors had sought after he pleaded guilty in May to one count of embezzlement by a bank officer.
“Haynes’ greed knew no bounds,” U.S. Attorney Kate E. Brubacher said in a statement. “He violated his professional obligations, his personal relationships, and federal law. Not only did Shawn Haynes defraud Heartland Bank and its investors, but his illegal schemes also threatened trust in financial institutions,” the attorney said.
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In addition, Mr. Haynes’ longtime neighbor Brian Mitchell described the former CEO’s actions during the sentencing as “absolutely evil.” He also said that Mr. Haynes showed no remorse for his actions during the sentencing.
According to the outlet, Mr. Haynes began stealing after being targeted in the pig-butchering scheme in late 2022. He began making wire transactions after communicating with the scammers — whose identities are still unknown — on WhatsApp. Initially, he used personal funds to buy crypto, but in early 2023 he stole $40,000 from the Elkhart Church of Christ and $10,000 from the Santa Fe Investment Club. He then used $60,000 taken from a daughter’s college fund and nearly $1 million worth of stock from Elkhart Financial Corporation. In May 2023, he then began making wire transactions from Heartland Tri-State Bank to accounts controlled by the scammers.
Eventually, Mr. Haynes was fired, and the bank was collapsed and taken over by the FDIC. Haynes, 53, was charged last February and placed under house arrest until his sentencing last week.
