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Citibank Sued Over Crypto Scam
In a striking case that highlights the rising threat of crypto-related romance scams, Michael Zidell has filed a lawsuit against Citibank, accusing the banking giant of gross negligence. The complaint, lodged on June 24 in New York, stems from Zidell’s alleged $20 million loss in a sophisticated romance scam commonly known as “pig butchering.”
Zidell is now seeking compensatory damages and coverage of legal fees, asserting that Citibank failed in its regulatory duties by allowing suspicious transactions to proceed without intervention. The suit brings into sharp focus the banking industry’s role in monitoring fraud, particularly in the increasingly complex landscape of digital assets and online scams.
Romance Turns Costly Investment Trap
According to court documents, Zidell’s nightmare began in January 2023 when he was contacted via Facebook by a woman identifying herself as “Carolyn Parker.” Claiming to be a successful business owner from California, Parker quickly moved their conversations to the Chinese messaging app WeChat, where the two communicated through both text and video.
Over time, their digital relationship evolved into what Zidell perceived as a romantic connection. Trust was built meticulously, a trademark characteristic of pig butchering scams, where perpetrators invest time and emotional manipulation to deceive victims.
By February 2023, Parker allegedly convinced Zidell to invest in non-fungible tokens (NFTs) via a platform named OpenrarityPro.com. Claiming she had made millions, she presented screenshots of her earnings and account balances as apparent proof of the platform’s legitimacy.
Zidell, persuaded by both emotion and opportunity, began making wire transfers to various bank accounts listed on the fraudulent platform. Over the course of several months, he made 43 such transfers, sending millions of dollars across multiple banks.
Citibank Flagged in Transfers
Out of the 43 transactions Zidell executed, twelve—totaling nearly $4 million—were routed to accounts held at Citibank under the name Guju Inc. According to the lawsuit, the very first transfer made to Guju Inc. significantly exceeded the company’s reported annual revenue, raising questions about why Citibank allowed the transfer to proceed.
The complaint highlights that Guju Inc.’s account opening documents with Citibank projected wire transfers under $250,000 per month. Yet Zidell’s first transaction alone was well over that figure. The plaintiff argues this massive discrepancy should have prompted an internal review under standard Know Your Customer (KYC) and Anti-Money Laundering (AML) compliance protocols.
Further transfers—rounded figures inconsistent with typical business transactions—allegedly continued without interruption or scrutiny. Zidell accuses Citibank of ignoring numerous red flags, including the mismatch between transaction patterns and Guju Inc.’s declared business activities.
Bank Duties Under Scrutiny
Zidell’s lawsuit zeroes in on Citibank’s obligations under federal compliance laws. U.S. banks are mandated to identify and report suspicious activity, especially large or irregular wire transfers that might suggest fraud or money laundering. The suit argues Citibank violated these duties by allowing repeated high-value transactions to flow into an account that did not justify such volume.
According to legal experts, the case may test the extent to which banks are liable when customers are defrauded, especially through third-party scams like those involving cryptocurrency and romance-based schemes.
Zidell claims that Citibank’s failure to intervene—even as the nature and frequency of transactions pointed to suspicious conduct—directly enabled the scammers’ success and his financial ruin.
The plaintiff’s legal team is expected to argue that Citibank had both the tools and regulatory obligation to investigate Guju Inc.’s account activity and failed to do so in blatant disregard of federal AML laws.
Pig Butchering Scams Rising Fast
This case brings renewed attention to pig butchering scams, a relatively new but devastating category of cyber fraud. Named after the method of fattening a pig before slaughter, these scams typically begin with social engineering—targeting individuals through dating apps, social media, or messaging platforms.
Once trust is established, scammers gradually lure victims into fake investment schemes, often involving cryptocurrencies, NFTs, or foreign exchange platforms. Victims are shown fake dashboards displaying large “returns,” encouraging them to invest more before the scam ends in sudden silence and financial devastation.
According to the FBI’s 2024 Internet Crime Report, investment fraud losses hit $5.8 billion, with pig butchering scams accounting for a significant portion. Victims over the age of 60 were hit hardest, losing approximately $2.8 billion, highlighting the demographic’s vulnerability to emotional and financial manipulation.
Crypto experts and regulators alike have sounded the alarm over the scale and sophistication of these scams, which increasingly involve fake trading platforms, cloned websites, and even deepfake videos of celebrities promoting bogus schemes.
In Zidell’s case, the financial damage was catastrophic, but his story echoes countless others who’ve fallen victim to the emotional and financial con artistry that defines pig butchering.
Regulatory and Industry Implications
The outcome of this lawsuit could set a new precedent in how financial institutions are held accountable for failing to detect and prevent fraud—even when the primary deception originates outside their platforms.
Legal observers suggest the case may force banks to adopt stricter KYC and AML protocols, particularly when it comes to processing high-value crypto-related transfers. With courts increasingly recognizing the duty of care banks have toward their clients, a ruling in favor of Zidell could inspire further litigation from similarly affected individuals.
At the same time, the case underscores the need for greater consumer education around online romance and crypto investment scams. Financial regulators and crypto exchanges have begun stepping up warnings, but enforcement remains a challenge given the international and digital nature of these fraud networks.
Conclusion
Michael Zidell’s lawsuit against Citibank may only be the beginning of a broader legal reckoning over the role of banks in enabling digital asset fraud. As pig butchering scams evolve and target more victims, financial institutions could find themselves increasingly in the legal crosshairs for failing to prevent the transfer of funds into suspicious hands.
This case serves as a wake-up call for both investors and banks alike: in the world of digital finance and online relationships, due diligence can no longer be optional.