Legal Action Against Citibank
A man from Texas has initiated legal action against Citibank, claiming the bank played a role in facilitating a $20 million pig butchering scam. This type of scam involves fraudsters forming trusting relationships with victims before directing them to invest money into fake ventures.
The Scam Details
Michael B. Zidell alleges that in early 2023, he was approached on Facebook by an individual posing as Carolyn Parker, a business owner from California. Zidell reportedly developed a romantic connection with Parker, who claimed to have earned significant profits by investing in non-fungible tokens (NFTs) on a platform called OpenrarityPro.com. Following her guidance, Zidell executed a series of 43 wire transfers, amounting to $20 million, into various accounts to support what he believed was a legitimate NFT marketplace.
Involvement of Citibank
Among these transactions, 12 transfers totaling nearly $4 million were directed to an account associated with Citibank, identified as belonging to Guju, Inc. Approximately a month after Zidell began his investments, OpenrarityPro.com indicated that his account value had skyrocketed to over $300 million. However, when he attempted to withdraw funds, he was informed that he needed to deposit more money as a “risk deposit,” which raised his suspicions about potential fraud.
Discovery of Fraud
By late April, Zidell’s concerns became a reality when the OpenrarityPro.com website vanished entirely. In his lawsuit, Zidell’s legal team argues that Citibank failed to conduct proper due diligence regarding the Guju account, noting discrepancies between the account’s stated conditions and its actual transactions. According to the court filings, Guju, Inc. specified that it would not receive wire transfers exceeding $250,000 monthly and that its expected outgoing payments were considerably smaller. Nonetheless, the account received numerous large deposits, including ones from Zidell that significantly surpassed its described annual revenue.
Allegations Against Citibank
Zidell’s attorneys assert that Citibank acted irresponsibly and effectively assisted the scammers, claiming the bank had opened accounts that enabled Parker and her associates to commit fraud. They maintain that Citibank should be held accountable as an accomplice because their operations contradicted the agreed-upon terms and ignored evident warning signs of the fraudulent scheme. This lawsuit raises significant questions about the responsibilities of financial institutions in recognizing and addressing potential fraudulent activities when they surface.
