Citibank has been sued by a self-claimed victim of a crypto romance scam, alleging the bank ignored red flags that allowed scammers to make off with $20 million.
In a lawsuit filed in a Manhattan federal court on Tuesday, plaintiff Michael Zidell alleged Citibank turned “a blind eye to its statutory duties and obligations” when it allowed him to deposit millions of dollars to scammers who have accounts at the bank.
Zidell said he sent $20 million to scammers through dozens of transactions across multiple banks, including nearly $4 million to accounts they held at Citibank.
The complaint said the transactions were part of an elaborate romance scam, commonly called pig butchering, where scammers use a fake persona to build a romantic online relationship with a victim, using it to entice them into a fraudulent investment scheme.
Facebook romance led to scam NFT investments
Zidell said the scam started in early 2023 when he was contacted on Facebook by a “Carolyn Parker,” a purported business owner with whom he had a “friendly, social relationship, but later perceived a romantic one developing.”
A month into the relationship, Parker told Zidell he should invest in non-fungible tokens, as she claimed she’d made millions doing so and directed him to a trading platform.
Zidell decided to invest in the NFTs and made transfers to various bank accounts given to him by the trading platform. He was told multiple banks were needed due to a large volume of customer deposits.
He said that over the next few months, he sent 43 transfers totalling over $20 million to various bank accounts, but by late April, the website for the platform “was all of a sudden gone” along with his millions.
Citibank ignored scam warning signs, suit claims
The complaint accused Citibank of processing 12 transfers totaling around $4 million that went to a company called Guju Inc.
It also accused the bank of ignoring “red flags” in Guju’s accounts and alleged that the “large, round numbers of funds, among other things, should have triggered the bank’s investigation into the suspicious activity.”
“[Citibank] failed to implement adequate securities measures, failed to detect clearly suspicious transactions and failed to monitor the accounts even though large, round sums were transferred in and out of the accounts from trusts and other individuals in a suspicious manner,” read the complaint.
Zidell said Citibank aided and abetted the alleged scam and accused the bank of negligence, claiming it had “a duty to exercise due care in monitoring suspicious transactions.”
Cointelegraph has contacted Citibank for comment.
Romance scams are a multibillion-dollar swindle
Last year, romance scammers stole over $5.5 billion across 200,000 identified cases, security firm Cyvers told Cointelegraph in February.
Chainalysis estimated in February that all types of crypto scams stole around $9.9 billion in 2024, but that could rise to $12.4 billion as the analytics firm identifies more scammer-tied crypto wallets.
Earlier this month, US authorities said they’ve already seized $225 million tied to pig butchering scams this year in an operation led by the Secret Service, in what was the largest crypto seizure ever by the agency.
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