The Daily
The Sunday Read: ‘The Cryptocurrency Scam That Turned a Small Town Against Itself’
Sun, 2 Mar 2025
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 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 Tucker family pride: Tucker served on the board with his elderly father, Bill, who founded the bank four decades earlier. All of 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 converted the funds into cryptocurrencies. Then the money vanished. Unlock full access to New York Times podcasts and explore everything from politics to pop culture. Subscribe today at nytimes.com/podcasts or on Apple Podcasts and Spotify.
Chapter 1: What is the story behind the Heartland Tri-State Bank collapse?
Hi, I'm David Yaffe-Bellini, and I cover the cryptocurrency world for The New York Times. Last year, I came across a strange and really interesting story. It was about a bank in Kansas that collapsed. The bank was called Heartland Tri-State Bank, and it was located in this tiny rural community in the southwestern corner of Kansas called Elkhart.
The town of Elkhart is one of those really tight-knit, isolated communities whose charm and whole sense of itself kind of derives from the way that it's cut off from the outside world. Everyone in town knows each other. Everyone in town trusts each other. But a bank collapse is really serious business. The federal government has to step in.
They have to orchestrate a takeover really quickly, almost under the cover of night, to stop panic from spreading in the markets. On the day that Heartland collapsed and that it was taken over in July 2023, a really dramatic scene played out on the streets of Elkhart. There were blacked-out SUVs surrounding the bank, cargo vans with license plates that nobody in town recognized.
You had government officials walking into the bank building with power tools and ladders, pushing all the furniture to the perimeter of the room, taking down the security system, removing laptops and computers and piling all that hardware into the vans parked outside. And then a state banking official got up in front of the staff and made an announcement.
The bank had fallen victim to a scam, and now it was insolvent. What was especially remarkable about this scam was how big it was. And that's because the primary victim wasn't some random employee. It was the bank's president, a guy named Shane Haynes. And he had access to tens of millions of dollars, the bank's money. And when Haynes fell victim to this scam, he ended up stealing that money.
The total amount that he stole from the bank came out to $47.1 million. Shane Haynes was just about the last person anyone in Elkhart thought would fall for a scam like this. He had been part of the community for decades. He'd worked his way up from a loan officer to become president of the bank.
Everyone in town thought he was super smart, financially astute, a really good and reliable leader of this important community institution. Shane volunteered at high school football games. He served on the school board, preached at the local church, and he also represented the community in Washington.
He even once testified in front of the House of Representatives about the needs of small-town banks. This wasn't any ordinary bank either. Its shareholders were all locals. In many cases, people's shares in the bank made up the core of their emergency savings and retirement funds. So when the bank collapsed, people lost the money they had been hoping to pass on to their children and grandchildren.
And the person to blame was one of their own neighbors. So when I came across this story, my big question was, how did Shane Haynes, this pillar of the community who everyone in Elkhart knew and trusted, get ensnared in a scam like this, one that would lead to the downfall of an entire bank? And what does a traumatic event like this do to a small community?
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Chapter 2: How did the Heartland bank collapse affect Elkhart's community?
An hour earlier, Tucker helped the older man find the signature line on the government paperwork that dissolved the business their family started in 1984. 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 worth of shares, and with them, a source of wealth that Jim had hoped to pass on to his children. In the lobby, he and his father listened as the president of Dream First delivered a pep talk to Heartland's staff, telling them, if you dream it, we can help you achieve it. At the teller's counter, two young women were crying.
The building was full of people Tucker didn't recognize, presumably government officials overseeing the bank's closure. Some of them carried step stools, ladders, and power tools. They pushed the furniture to the perimeter of the room and took apart the bank's security system, removing the cameras.
Then they fanned out into the rest of the bank and carried away laptops and computers, piling the hardware into the cars parked outside. The two Tuckers watched it all unfold in front of them. Just watching it melt, Jim Tucker recalled, burned to the ground right there before our eyes. The failure of Heartland thrust Elkhart into a state of fear and confusion.
Nobody could quite believe what happened, but everyone seemed to agree that the money was gone. Wire transfers out of the bank spiderwebbed into an array of untraceable crypto wallets, a federal investigator explained in court last year. There is no indication that anyone knows where it is at this point, he said, or how to access it.
Still, a few clues emerged on the blockchain, a public ledger of crypto transactions. Many crypto scammers are based in Southeast Asia, where organized crime rings run pig butchering operations out of abandoned hotels and casinos. At least some of the money that Haines stole may have ended up in the hands of an organization that targeted other Americans.
In 2023, the scammers who approached Haynes appear to have orchestrated a similar plot that ensnared a wealthy Minnesotan, according to the crypto forensics firm Chainalysis, which analyzed the Heartland case at the request of the New York Times. The man was approached on LinkedIn by a woman who urged him to invest in crypto and to leave his wife for her. He lost more than $9 million.
Last May, Haynes pleaded guilty to a federal charge of embezzlement by a bank officer, a felony that carries a maximum sentence of 30 years in prison. He also faces local charges that are still pending against him. When he was sentenced in August, Heartland's shareholders drove four and a half hours to the federal courthouse in Wichita to attend the hearing.
One by one, they walked up to the courtroom lectern and called for Haynes to receive the longest possible sentence. They could muster sympathy for a scam victim, but not for someone who stole from his neighbors. If he is released the day he dies, that will be one day too early, one of them told the judge. No one in Elkhart has managed to make sense of the mystery at the center of the betrayal.
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