What to know:
- A DOJ complaint targets $225M in laundered USDT tied to a Manila scam that duped Shan Hanes, the Kansas banker whose $47M embezzlement led to his bank’s 2023 collapse.
- The DOJ traced $225 million in laundered USDT and $3 billion in total volume through 237 OKX accounts linked to 434 victims.
- The seized crypto may be added to a federal stockpile of digital assets ordered by President Trump
A Kansas banker who looted millions from his small-town bank in 2023, which triggered its collapse, lost much of the money to overseas crypto scammers targeted in a record-breaking DOJ bust, according to a complaint filed Wednesday.
Prosecutors have filed a civil forfeiture action targeting over $225 million in laundered USDT, part of a butchering scam with ties to a Philippines call center that ensnared Shan Hanes, the disgraced former CEO who embezzled $47 million from Heartland Tri-State Bank, a theft which was directly attributed to the agricultural lender's demise in 2023.
According to the Department of Justice complaint, OKX, a crypto exchange, provided key information that helped identify an intricate network of accounts on the exchange used to launder the crypto proceeds.
Scammers laundered funds by first directing victims to send USDT to 93 scam-controlled deposit addresses. From there, the funds were routed through as many as 100 intermediary wallets in a process designed to obscure the source of funds and mix deposits from multiple victims, according to the complaint.
These laundered funds were then funneled into 22 primary OKX accounts and further shuffled across 122 additional OKX accounts, all linked by shared IP addresses, reused KYC documents, and coordinated behavior allegedly traced to a Manila-based scam compound, which the complaint names as ITECHNO Specialist Inc.
In total, the DOJ says that approximately $3 billion in transaction volume was generated by this laundering network.
Largest victims
In total, the DOJ says there were 434 victims and has identified 60 of them who lost a combined $19.4 million.
The largest of these victims was Hanes, with the DOJ identifying $3.3 million of the $47 million he embezzled in this seizure.
Hanes embezzled the money between May 30, 2023, and July 7, 2023, according to both the DOJ complaint and the Federal Reserve’s report into the collapse of Heartland Tri-State Bank, one of the banks to collapse in the aftermath of the 2023 U.S. banking crisis.
During this six-week period, Hanes initiated 10 wire transfers totaling approximately $47.1 million from Heartland Tri-State Bank, a small community lender focused on agricultural loans, to a crypto wallet he controlled.
