Citibank Sued Over Alleged Negligence in Crypto Romance Scam
Citibank has been sued by Michael Zidell, a self-claimed victim of a crypto romance scam, alleging the bank ignored red flags that allowed scammers to make off with $20 million.
Details of the Lawsuit
In a lawsuit filed in a Manhattan federal court on Tuesday, plaintiff Michael Zidell alleged that Citibank turned “a blind eye to its statutory duties and obligations” when it allowed him to deposit millions of dollars to scammers who had accounts at the bank.
Zidell claimed 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 identified these transactions as part of an elaborate romance scam, commonly called pig butchering, wherein scammers create a fake persona to build a romantic online relationship with a victim, eventually enticing them into a fraudulent investment scheme.
Facebook Romance Led to Scam NFT Investments
Zidell reported that the scam began in early 2023 when he was contacted on Facebook by a “Carolyn Parker,” a purported business owner with whom he initially had a “friendly, social relationship,” which he later perceived as potentially romantic.
A month into the relationship, Parker suggested Zidell invest in non-fungible tokens (NFTs), claiming she had made millions through such investments, and directed him to a trading platform.
Zidell decided to invest in the NFTs and made transfers to various bank accounts provided by the trading platform. He was informed that multiple banks were needed due to a large volume of customer deposits.
According to the complaint, Zidell sent the allegedly fraudulent platform, OpenrarityPro, over $20 million. Over the next few months, he conducted 43 transfers totaling over $20 million to various bank accounts. By late April, the website for the platform disappeared along with his millions.
Citibank Ignored Scam Warning Signs, Suit Claims
The complaint accused Citibank of processing 12 transfers totaling around $4 million to a company called Guju Inc. It further alleged that Citibank ignored “red flags” in Guju’s accounts and claimed 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 security 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,” the complaint stated.
Zidell accused Citibank of aiding and abetting the alleged scam and claimed the bank was negligent, asserting it had “a duty to exercise due care in monitoring suspicious transactions.” Cointelegraph has contacted Citibank for comment.
Romance Scams: A Multibillion-Dollar Swindle
Last year, romance scammers reportedly stole over $5.5 billion across 200,000 identified cases, according to security firm Cyvers. Chainalysis estimated in February that all types of crypto scams stole around $9.9 billion in 2024, a figure that could rise to $12.4 billion as the analytics firm identifies more scammer-tied crypto wallets.
Earlier this month, US authorities announced they had already seized $225 million tied to pig butchering scams this year in an operation led by the Secret Service, marking the largest crypto seizure ever by the agency.
Legal Panel: Crypto’s Evolution
Crypto wanted to overthrow banks, now it’s becoming them in stablecoin fight
Image Credit: cointelegraph.com
