A recent lawsuit alleges Citibank ignored clear warning signs of a sophisticated $20 million crypto romance scam, allowing a victim to transfer substantial funds to scammers. The plaintiff claims the bank failed in its duty to monitor suspicious transactions, contributing to his significant financial loss.
Citibank Sued Over Alleged Negligence in $20 Million Crypto Romance Scam
Michael Zidell has filed a lawsuit against Citibank in a Manhattan federal court, accusing the bank of turning "a blind eye to its statutory duties and obligations." Zidell claims he lost $20 million in an elaborate crypto romance scam, with nearly $4 million of that sum transferred to accounts held by scammers at Citibank.
The "Pig Butchering" Deception Unveiled
The scam, a form of "pig butchering," began in early 2023 when Zidell was contacted on Facebook by a person claiming to be "Carolyn Parker." After developing what he perceived as a romantic relationship, Parker encouraged Zidell to invest in non-fungible tokens (NFTs), claiming significant personal profits. Zidell subsequently made 43 transfers totaling over $20 million to various bank accounts provided by a fraudulent trading platform, OpenrarityPro. By late April, the platform vanished, along with his investments.
Allegations of Ignored Red Flags
The lawsuit specifically targets Citibank for processing 12 transfers, amounting to approximately $4 million, to a company named Guju Inc. Zidell alleges that Citibank should have identified numerous "red flags" in Guju's accounts, such as large, round sums of money being transferred in and out, which should have triggered an investigation into suspicious activity. The complaint states that Citibank "failed to implement adequate securities measures, failed to detect clearly suspicious transactions and failed to monitor the accounts."
Key Takeaways
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Michael Zidell is suing Citibank for alleged negligence in a $20 million crypto romance scam.
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Zidell claims Citibank ignored red flags related to transactions totaling nearly $4 million.
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The scam involved a "pig butchering" scheme, where a fake romantic relationship led to fraudulent NFT investments.
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The lawsuit accuses Citibank of aiding and abetting the scam and failing to exercise due care in monitoring suspicious transactions.
The Broader Impact of Romance Scams
Romance scams represent a significant financial threat globally. In the past year, romance scammers reportedly stole over $5.5 billion across 200,000 identified cases. Crypto scams, in general, are estimated to have accounted for around $9.9 billion in losses in 2024, with projections indicating this figure could rise. Authorities are actively combating these schemes, with US authorities recently seizing $225 million tied to pig butchering scams in what was the largest crypto seizure by the Secret Service to date.
Sources
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Citibank Ignored Signs Of $20M Crypto Scam, Lawsuit Claims, Cointelegraph.
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