Citibank Sued for ‘Turning a Blind Eye’ as Man Funnels $20M to Crypto Romance Scammers – Should the Bank Bear the Consequences?

Citibank Accused Of Failing To Flag Red Flags In $20M Romance Crypto Scam

A man who lost $20 million in an alleged crypto scam claims Citibank failed to stop suspicious transfers that could have prevented the fraud.

Michael Zidell, the plaintiff, has filed a lawsuit in Manhattan federal court accusing the bank of negligence after a series of wire transfers he made to scammers went unchecked.

Nearly $4 million of those funds were routed through Citibank accounts.

The scam, known as a “pig butchering” scheme, involved a fake online romance designed to manipulate Zidell into making fraudulent investments.

How A Facebook Chat Turned Into A Multimillion-Dollar Fraud

According to the complaint, Zidell was contacted on Facebook in early 2023 by a woman named “Carolyn Parker,” who claimed to be a business owner.

Their online exchanges developed from casual conversation into what Zidell believed was a romantic relationship.

Parker eventually suggested he invest in non-fungible tokens (NFTs), claiming she had made large profits through a specific trading platform.

Source: pexels.com

Trusting her advice, Zidell wired over $20 million across 43 transactions to various bank accounts connected to the supposed investment.

He was told by the scammers that different banks were used due to high customer traffic.

By late April 2023, the platform vanished, taking Zidell’s money with it.

Citibank’s Role In The Transfers Under Scrutiny

Twelve of those transactions—totalling around $4 million—were sent to accounts held at Citibank under the name Guju Inc.

Zidell alleges the activity in these accounts showed clear warning signs, including large, round-number transfers from individuals and trust accounts.

He claims these patterns should have prompted Citibank to conduct further checks under anti-money laundering protocols.

The lawsuit argues that Citibank “turned a blind eye to its statutory duties and obligations” by failing to monitor or investigate the flagged activity.

Zidell is seeking damages and holds the bank responsible for not acting on red flags that could have exposed the scam earlier.

Romance Scams Continue To Target Victims At Scale

Pig butchering schemes have become increasingly common and costly.

Security firm Cyvers reported in February that romance scams accounted for over $5.5 billion in losses last year across more than 200,000 known cases.

Meanwhile, blockchain analytics firm Chainalysis estimated total crypto scam losses in 2024 reached $9.9 billion, with projections that the figure could rise to $12.4 billion as more fraudulent wallets are identified.

This month, U.S. authorities confirmed a record seizure of $225 million tied to similar scams.

The operation involved cooperation from Coinbase and Tether, who helped identify 130 victims and freeze suspicious crypto wallets.

Can Victims Rely on Banks to Detect and Stop Fraud in Time?

Cases like Zidell’s are not just stories of individual loss—they reveal weaknesses in institutional safeguards that should protect against fraud.

As scammers grow more sophisticated, banks face mounting pressure to balance customer service with regulatory duties.

How many more red flags need to be missed before tighter systems are enforced?

Should the bank bear the consequences for failing to act on clear warning signs, or does responsibility ultimately lie with the victim for falling prey to the scam?

These challenges how far banks must go to protect customers without overstepping, and whether existing regulations sufficiently hold financial institutions accountable in the digital age.