THE CRYPTO SCAM THAT SNARED A SMALL TOWN

How did a successful banker gamble his community's money away?

- BY David Yaffe-Bellany, FROM THE NEW YORK TIMES MAGAZINE

Jim Tucker could hardly believe what he was hearing. It sounded like fiction, a nightmare too outlandish for an unassuming town like his.

It was July 2023, and Tucker was hosting a meeting of the board of directors 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 family pride: Tucker served on the board with his elderly father, who had 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 had converted the funds into cryptocurrencies. Then the money had vanished.

Tucker's first inkling that something was wrong came from a friend, an investor in the bank who was close to Hanes. A few days before the board meeting, he confided to Tucker that Hanes had messed up: A wire transfer had gone out, supposedly to help a struggling customer, and now the bank was $30 million in the hole.

By the time the board members gathered, it was clear that Heartland was caught up in some sort of financial scam, a sophisticated grift that had delivered the bank’s assets into the clutches of an overseas crypto crime network.

At the meeting, Hanes seemed oddly nonchalant, exuding the air of an overconfident salesman. Tucker had heard that he'd spent the past week at an out-of-state leadership conference.

"Guys, I'm sorry," Hanes told the board. "But we're going to get it fixed."