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A victim of a sophisticated crypto romance scam, Michael Zidell, has expanded his legal battle beyond Citibank, filing new lawsuits against East West Bank and Cathay Bank. Zidell alleges these institutions turned a blind eye to suspicious transactions totaling over $20 million, which he lost in an NFT investment scheme. He claims the banks are liable for negligence and aiding and abetting the fraud.
Crypto Romance Scam Unravels
Michael Zidell's ordeal began in early 2023 when he was contacted on Facebook by a person named "Carolyn Parker," who claimed to be a successful business owner. A romantic relationship developed, and Parker allegedly convinced Zidell to invest in non-fungible tokens (NFTs), directing him to a specific trading platform. Over several months, Zidell made 43 transfers, totaling over $20 million, to various bank accounts provided by the platform. The platform claimed it needed to process funds through multiple banks due to high customer deposit volumes. By April 2023, the platform's website vanished, along with Zidell's investments.
Banks Accused of Negligence and Aiding Fraud
Zidell's lawsuits against Citibank, East West Bank, and Cathay Bank accuse them of failing to detect and act upon numerous red flags. He claims:
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Citibank: Ignored suspicious activity in 12 transfers totaling approximately $4 million.
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East West Bank: Received nearly $7 million across 18 transfers to the alleged scammers' account.
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Cathay Bank: Received over $9.7 million across 13 transfers to an account allegedly controlled by the scammers.
The lawsuits argue that the banks had a duty to monitor suspicious transactions and that the large, round numbers of funds transferred should have triggered investigations. Zidell seeks to hold the banks liable for negligence and as "aiders and abettors" of securities fraud.
Elder Abuse Allegations Added
In his lawsuits against East West Bank and Cathay Bank, Zidell has also included an accusation of "aiding and abetting elder abuse." While his age is not specified in the complaint, California law defines an elder as someone 65 years old or over. This particular claim was not made in the initial lawsuit against Citibank. Zidell is seeking compensatory damages, legal costs, and interest through a jury trial.
Key Takeaways
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Michael Zidell, a victim of a $20 million crypto romance scam, has sued Citibank, East West Bank, and Cathay Bank.
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He alleges the banks were negligent in failing to identify and prevent suspicious transactions related to the scam.
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The scam involved a purported romantic relationship leading to investments in non-existent NFTs.
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Zidell is seeking compensatory damages and has also accused East West Bank and Cathay Bank of aiding and abetting elder abuse.
Sources
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Crypto Scam Victim Ropes 2 More Banks Into $20M Fraud Suit, Cointelegraph.
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