Citibank Sued for $20 Million Crypto Romance Scam

Citibank is facing a lawsuit from a victim of a crypto romance scam, who alleges that the bank ignored warning signs that allowed scammers to steal $20 million. The plaintiff, Michael Zidell, filed the lawsuit in a Manhattan federal court, claiming that Citibank failed to fulfill its statutory duties and obligations by allowing him to deposit millions of dollars into accounts held by scammers at the bank.

Zidell's complaint details how he was targeted in an elaborate romance scam, commonly known as "pig butchering," where scammers create a fake persona to build a romantic online relationship with a victim. The scam began in early 2023 when Zidell was contacted on Facebook by someone posing as "Carolyn Parker," who claimed to be a business owner. After a month, Parker suggested that Zidell invest in non-fungible tokens (NFTs), claiming she had made millions doing so. Zidell was directed to a trading platform and made transfers to various bank accounts, including those held at Citibank.

Over the next few months, Zidell sent 43 transfers totaling over $20 million to various bank accounts. By late April, the website for the trading platform had disappeared, along with his millions. The complaint accuses Citibank of processing 12 transfers totaling around $4 million that went to a company called Guju Inc. and ignoring "red flags" in Guju’s accounts, such as large, round numbers of funds that should have triggered an investigation into the suspicious activity.

The lawsuit alleges that Citibank failed to implement adequate security measures, detect clearly suspicious transactions, and monitor the accounts despite the suspicious nature of the transfers. Zidell claims that Citibank aided and abetted the scam and was negligent in its duty to exercise due care in monitoring suspicious transactions. The complaint seeks damages for the losses incurred due to the bank's alleged negligence.

Romance scams, including the "pig butchering" scheme, are a significant financial threat. These scams often involve building a romantic relationship with the victim to gain their trust and then convincing them to invest in fraudulent schemes. The sophistication of these scams makes them difficult to detect, and victims often lose substantial amounts of money. The lawsuit against Citibank highlights the need for financial institutions to implement robust security measures to protect customers from such fraudulent activities.