A lawsuit filed in New York has accused Citibank of negligence after one of the bank’s customers lost $20 million to a crypto romance scam.
Plaintiff Michael Zidell, who filed the complaint on June 24, is seeking compensatory damages and legal costs. Zidell alleges the bank failed to detect and act on suspicious wire transfers linked to the scam, which led to substantial financial loss.
Zidell claims he was targeted in a fraudulent investment scheme commonly known as “pig butchering,” in which scammers form fake online relationships with victims to lure them into fraudulent investments.
Zidell was allegedly contacted in January 2023 on Facebook by a woman identifying herself as Carolyn Parker, who claimed to be a business owner in California. Their communication continued over video and text on the WeChat app, eventually developing into what Zidell perceived to be a romantic relationship.
By February 2023, Parker encouraged Zidell to invest in non-fungible tokens through a platform called OpenrarityPro.com. She claimed to have earned millions and presented what appeared to be account statements as proof.
Zidell then began transferring funds to various bank accounts provided through the website, allegedly as part of the NFT investment.
Zidell made a total of 43 transfers across multiple banks, with twelve of those transactions, amounting to nearly $4 million, sent to accounts held at Citibank under the name Guju Inc.
According to the filing, the first wire transfer to Guju Inc. alone exceeded the entity’s stated annual revenue and contradicted its account opening documents, which projected monthly wire transfers below $250,000.
The suit alleges that Citibank failed to act on numerous red flags, including large, round-sum transfers inconsistent with the account holder’s declared business activity.
Per the plaintiff, the bank disregarded its obligations under federal Know Your Customer and Anti-Money Laundering laws by failing to investigate Guju Inc.’s activity despite clear indicators of suspicious behavior.
Pig butchering scams have become a major concern for both federal authorities and crypto industry participants. In its 2024 Internet Crime Report, the FBI revealed that pig butchering scams were among the most damaging crypto-related crimes, which led to $5.8 billion in investment fraud losses reported last year.
Older Americans were the most affected, with victims aged 60 and above losing $2.8 billion to crypto scams alone.
