Michael Zidell has filed a lawsuit against Citibank in a Manhattan federal court, accusing the bank of ignoring warning signs that enabled scammers to steal $20 million through a crypto romance scam.
Zidell claims Citibank “turned a blind eye” to suspicious transactions, allowing him to transfer nearly $4 million to scam-linked accounts held at the bank.
The scam, known as “pig butchering,” involved a fake online persona named Carolyn Parker, who contacted Zidell on Facebook in early 2023. After establishing what Zidell initially described as a friendly, then romantic relationship, Parker persuaded him to invest in non-fungible tokens (NFTs), claiming she had profited millions. Zidell transferred funds across multiple bank accounts linked to the fraudulent trading platform, including 43 transfers totalling over $20 million. By late April, the platform’s website disappeared along with his investments.
The complaint highlights that Citibank processed 12 transfers, amounting to approximately $4 million, to a company named Guju Inc., which is linked to the scam. Zidell alleges the bank ignored “red flags,” such as large, round-number transactions and suspicious account activity, which should have triggered an investigation. He accuses Citibank of negligence and aiding the scam by failing to monitor and detect these suspicious transactions, breaching its duty of care.
Romance scams have become a significant threat, with over $5.5 billion lost globally in 2024 alone, according to security firm Cyvers. Crypto scams overall are estimated to have stolen nearly $9.9 billion so far this year, potentially rising to $12.4 billion as more cases emerge. U.S. authorities recently seized $225 million linked to pig butchering scams in the largest crypto seizure by the Secret Service to date.
Citibank has yet to comment on the allegations. This case underscores the growing challenges banks face in detecting and preventing sophisticated crypto-related fraud schemes.
Meanwhile, Australia’s financial watchdog, the Australian Securities and Investments Commission (ASIC), has imposed a 10-year ban on Glenda Maree Rogan, a former financial adviser, after alleging she channelled $9.6 million of her clients’ funds into a cryptocurrency scam.
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