DOJ Seizes Over $225M in USDT Linked to Pig Butchering Scam That Toppled Kansas Bank

The Department of Justice has seized over $225 million in USDT laundered through a global scam ring tied to a collapsed Kansas bank—exposing how sophisticated “pig butchering” schemes continue to exploit both regulated institutions and individuals. Former Heartland Tri-State Bank CEO Shan Hanes is at the epicenter, having lost millions from embezzled funds to crypto fraudsters now under DOJ scrutiny.

How a Small-Town Bank Became Ground Zero for Global Crypto Fraud

Kansas-based Heartland Tri-State Bank, once a reputable agricultural lender, was thrust into the spotlight when its CEO, Shan Hanes, orchestrated an embezzlement of $47 million in 2023. Instead of personally benefiting, Hanes funneled much of the stolen capital to overseas scam artists who promised lucrative cryptocurrency returns. This transfer of funds sparked a chain reaction that ultimately led to Heartland’s collapse—a downfall now revealed as part of a sweeping, international “pig butchering” operation centered on USDT, a popular stablecoin.

Inside the DOJ’s Largest Pig Butchering Seizure

A newly unsealed DOJ complaint details a civil forfeiture targeting over $225 million worth of laundered USDT, all connected to a Manila-based scam network that preyed on at least 434 victims. The investigation traced a labyrinth of transactions: funds were first sent to nearly 100 fraudulent deposit addresses, then shuffled through more than 100 intermediary wallets. These assets were eventually consolidated into dozens of primary and secondary OKX exchange accounts, all meticulously linked by institutional patterns, shared information, and coordinated behavior.

Key Stats & Figures

• USDT Seized by DOJ: >$225 million, a record for a pig butchering-related case
• Total Embezzlement from Heartland Tri-State Bank: $47 million between May and July 2023
• Global Transaction Volume in Scam Network: $3 billion across 237 OKX accounts
• Number of Known Victims: 434, with 60 identified as collectively losing $19.4 million

Modus Operandi: Laundering Through Obscure Networks

The scam exploited classic social engineering tactics via a Philippine call center named ITECHNO Specialist Inc. Victims were steered to deposit USDT to designated wallets, which were then obscured through a network of intermediary wallets designed to hide their origins. OKX, a leading crypto exchange, played a crucial role by providing information that helped uncover the web of 237 accounts used for laundering. Notably, many accounts shared identifiers—a sign of coordinated activity exploited by the perpetrators. Hanes’ role was especially notable; not only was he classified as a perpetrator due to his theft from the bank, but also as the single largest victim of the scam when millions he embezzled disappeared into the fraud network.

The Aftermath: Bank Closure, Sentencing, and Asset Recovery

Hanes’ six-week embezzlement spree occurred under the radar between reporting cycles, rapidly draining the bank’s liquidity and leaving a $35 million hole in its capital reserves. Regulators ultimately ordered Heartland’s closure in July 2023, directly citing Hanes’ wire transfers and theft. Beyond the bank, Hanes also misappropriated smaller sums from community organizations and his own family, including $40,000 from a local church and $60,000 from his daughter’s college fund. Following a DOJ investigation, he was sentenced to 24 years in prison in August 2024. While the government has now seized USDT linked to these crimes, only a fraction of lost funds are likely to be returned to victims—the majority of impacted individuals remain unidentified in the ongoing probe.

Conclusion: What This Means for the Market

The DOJ’s action signals an intensifying crackdown on global cryptocurrency scams and illicit laundering. Although President Trump has ordered a federal crypto reserve, it’s unclear how much of the seized assets will be redistributed or placed into government stockpiles versus returned to users. For banks, investors, and everyday clients, the Heartland saga spotlights the evolving intersection of traditional finance and crypto crime—and underscores the critical need for vigilance, KYC protocols, and robust oversight as digital asset adoption continues to expand.