Hey, Pig. The Feds Found Your Crypto
This Week In Blunders - June 15 - 21
“The riskiest thing you can do is get greedy.” – Lance Armstrong
The Feds nabbed $225.3 million worth of crypto this week in the largest-ever seizure of stolen and laundered cryptocurrency – and a large chunk of it was tied to Piggy Banker Shan Hanes.
Hanes currently resides in Leavenworth on a 24-year prison sentence after looting more than $47 million from his bank and inexplicably losing it all to crypto crooks.
The CEO of Heartland Tri-State Bank in Elkhart, Kan., was the victim of what’s called a pig-butchering scheme. The fraud he committed to feed his online scammers led to the failure of what had been a pillar of his tiny farming community in 2023.
“I’ll forever struggle understanding how I was duped,” Hanes said at sentencing, as quoted in a deep dive by The New York Times. “I should have caught it, but I didn’t.”
Haynes was literally a towering figure in his small town, standing over 6 feet and five inches tall. He’s married with three daughters, and he served as a part-time preacher at his church as well as an outspoken community banking advocate. He was so Mr.-Man-About-Town that nobody at the bank questioned his multimillion-dollar wire transfers.
Yet Hanes fell for a common scam where victims are slowly fattened and harvested like pigs.
Scammers build trust, present an investment opportunity, create the false impression that it’s making money, and then entice victims to invest more. Then comes the slaughter when victims find they can’t make withdrawals and the perpetrators have disappeared.
"Mr. Hanes made some very bad choices after being caught up in an extremely well-run cryptocurrency scam,” his attorney John Stang wrote in a sentencing memo. “He was the pig that was butchered.”
The good news is that on Wednesday the U.S. Attorney’s Office announced that it had seized Hanes’ crypto and millions more that was tied to other scams. In total, investigators identified 434 victims.
Stealing crypto is big business, topping $5.8 billion in reported losses in 2024 alone, according to the FBI. But what’s not widely understood is that crypto transactions can be traced through blockchain analysis and other investigative techniques.
The Fed’s 75-page civil action explains to some extent how this was done, despite criminal efforts to run their fraudulent transactions through a Byzantine series of crypto wallets and accounts.
Too bad Hanes won’t get any of this money back. It’s likely going into a federal stockpile of digital assets ordered by President Donald Trump.
Con Air
Families of the 346 people killed in two Boeing MAX crashes in 2018 and 2019 want a judge to nix a deal that the aerospace giant cut to avoid criminal prosecution.
“Boeing’s crime may properly be considered the deadliest corporate crime in U.S. history,” Judge Reed O’Connor said in 2023 – and the families quoted it back to him in their request.
Last year, Boeing agreed to plead guilty to a felony but it has since cut a deal with prosectors to avoid criminal prosecution. The new agreement would require Boeing to pay and invest more than $1.1 billion, including an additional $445 million to crash victims’ families.
As Business Blunders noted on Monday, Boeing is already on a long list of criminally charged corporations. What’s one more felony?
Thoroughly dehumidified
Here’s one way to get the excess moisture out of your house: Plug in a Made-In-China dehumidifier and watch it catch fire.
On Monday, two California businessmen were sentenced to prison for failing to report defects in their dehumidifiers as owners and officers of Gree USA Inc.
Simon Chu, 70, of Pomona, got 38 months, and Charley Loh, 67, of Arcadia got 40 months.
Their dehumidifiers were linked to 450 fires and millions of dollars in property damage. And they failed to file required reports to the U.S. Consumer Product Safety Commission about the problems.
Their company itself pleaded guilty to criminal charges in April 2023. Too bad Gree USA didn’t have the big-money sway of say, Boeing, to avoid a felony.
Chu and Loh have now made history as the first businessmen ever prosecuted for a failure to report under the Consumer Product Safety Act.
You might say it was just a little ol’ reporting violation. But the lesson here is simple: File your paperwork, especially if your products are lighting peoples’ homes on fire.
What’s the point?
Business Blunders highlights the biggest mistakes in business in hopes of demanding more accountability from corporate leaders and making the business world a safer and more honest place. But the business world seems to be headed in the opposite direction with more fraud and folly.
Not only has the Consumer Financial Protection Bureau and other key government watchdogs been gutted, but now the Justice Department is promising less enforcement.
“Excessive enforcement and unfocused corporate investigations stymie innovation, limits prosperity, and reduces efficiency,” said Matthew Galeotti. “So that ends today.”
It’s the ol’ let’s-do-more-with-less excuse.
Galeotti heads the Justice Department’s criminal division. He made the remarks at the annual Anti-Money Laundering and Financial Crimes Conference hosted by SIFMA, or the Securities Industry and Financial Markets Association.
They’ll likely resurface when our next financial crisis hits and destroys the lives of millions of Americans. In the meantime, will someone please remind me why I should bother to keep writing about this stuff?
(A special thanks to award-winning investigative journalist Susan Antilla for pointing this out.)
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Behind Business Blunders In a rare podcast appearance, hosts want to know who is the intended audience for Business Blunders, and what is my goal for this publication? Like I know?
Keep writing to keep exposing truths which otherwise would remain underreported. And with corporate crimes such as Boeing’s buy off of the tramp regime to reduce its fines never fail to point out examples of this corruption.
As sad and depressing as it all is, please don't stop writing about it. We need an informed electorate.