Citibank Sued for $20 Million Role in Pig Butchering Scam

Citibank is facing a lawsuit from a Texas man who alleges that the financial institution enabled scammers in a $20 million pig butchering scheme. The lawsuit, filed by Michael B. Zidell, claims that Citibank ignored numerous red flags and provided substantial assistance to the scammers, allowing them to defraud him of a significant amount of money.

Pig butchering scams typically involve scammers gaining the trust of victims over time to convince them to invest digital assets or cash into fraudulent websites that they control. In this case, Zidell was contacted on Facebook in early 2023 by someone claiming to be a California business owner named Carolyn Parker. Zidell believed that a romantic relationship was developing with Parker, who told him that she had invested in non-fungible tokens (NFTs) on a website called “OpenrarityPro.com” and made millions of dollars in investment gains.

Zidell sent 43 wire transfers totaling $20 million to different accounts to “make a market” for NFTs on OpenrarityPro.com as Parker had instructed. Of those, 12 transfers worth nearly $4 million were sent to one Citibank account called Guju, Inc. A month or so after Zidell started investing, OpenrarityPro.com displayed his account as being worth more than $300 million, but when he tried to withdraw some of the funds, he was told he’d have to send more money to cover a “risk deposit.”

In late April, the OpenrarityPro.com website disappeared, and Zidell began to suspect he was the victim of fraud. Zidell’s lawyers argue in the court documents that Citibank didn’t exercise thorough due diligence on the Guju account. The account opening documents for Citibank’s accounts for Guju, Inc., stated that it would receive no wire transfers, and the total value of the wires it would out would be less than $250,000 per month. In fact, the account received no less than twelve (12) wires from Zidell and dozens from others. Some of the outbound wires exceeded $2,000,000.00. Even worse, the account stated an annual gross revenue of $300,000 and Guju received more than 12 times that amount from Zidell alone in two weeks. The first wire from Zidell exceeded Guju’s stated annual revenue by almost 50%.

Zidell’s lawyers also argue that Citibank operated recklessly and provided “substantial assistance” to Parker and her co-conspirators by opening bank accounts and providing services. “Defendant is liable as an aider and abettor as it, directly or indirectly, knew of the tortious conduct of the NFT Enterprise because the transactions at issue expressly contradicted the account opening documents and violated… ‘red flags.’ Defendant materially aided the seller or issuer of a security and are, therefore, jointly and severally liable with the seller or issuer and to the same extent as the seller or issuer.”

This lawsuit highlights the growing concern over pig butchering scams, which have become increasingly prevalent in recent years. These scams often target individuals who are looking to invest in digital assets or cryptocurrencies, and they can result in significant financial losses for victims. The lawsuit against Citibank raises important questions about the role of financial institutions in preventing and responding to these types of fraud. If Citibank is found to have ignored red flags and provided substantial assistance to the scammers, it could set a precedent for holding financial institutions accountable for their role in facilitating fraudulent activities.