A victim who claims to have fallen for a cryptocurrency romance scam has recently filed a lawsuit against Citibank for failing to recognize warning signs, and has now initiated similar lawsuits against two other banks.
Michael Zidell filed a lawsuit on Tuesday (July 2) in California federal court against East West Bank and Cathay Bank, accusing both banks of being "willfully blind" to their statutory duties and obligations.
He stated that he initiated 18 transfers totaling nearly $7 million to the account involved at East West Bank, and made 13 transfers totaling over $9.7 million to an account at Cathay Bank.
Zidell sued Citibank on June 24, accusing it of failing to issue warnings regarding 12 transfers totaling about $4 million that flowed into the involved account at the bank.
Cointelegraph has reached out to East West Bank and Cathay Bank's parent company, Cathay General Bancorp, for comments on the matter.
In his complaint, Zidell claims that a person identifying herself as a business owner, "Carolyn Parker," contacted him via Facebook in early 2023, and the two subsequently developed a romantic relationship.
It is alleged that Parker told Zidell after a month of dating that she had made millions of dollars by investing in non-fungible tokens (NFTs) and suggested that he also invest, while guiding him to register on a certain trading platform.
Zidell decided to invest and stated that over the next few months, he transferred a total of 43 transactions to multiple bank accounts provided by the platform, totaling over $20 million. The platform claimed that due to the large volume of customer deposits, multiple banks were needed to handle the funds.
He said that by April 2023, the trading platform's website suddenly disappeared, along with his millions of dollars. "Romance scam, pig butchering, rug pull—these are some of the terms used to describe the scam the plaintiff encountered."
Similar to the lawsuit against Citibank, Zidell's latest lawsuit seeks to hold East West Bank and Cathay Bank liable for negligence and as "aiding and abetting securities fraud."
The complaint states: "The defendants, through negligence, substantially assisted Parker and her accomplices, including opening bank accounts for her, providing services including wire transfers, and allowing these services to be used for NFT-related fraudulent activities."
The complaint also points out that both banks had the obligation to "monitor suspicious transactions and fulfill their reasonable review responsibilities," but "failed to detect obviously suspicious transaction behaviors."
Zidell stated, "Large, round-number fund transfers should have prompted the banks to proactively investigate suspicious activities."
The lawsuit also attempts to hold East West Bank and Cathay Bank liable for "aiding and abetting elder abuse," a charge not brought against Citibank.
Zidell did not mention his age in the complaint, but California law defines individuals aged 65 and older as elderly.
His lawsuit seeks compensatory damages, legal fees, and interest, and requests a jury trial.
Related: U.S. Senator Cynthia Lummis drafts independent cryptocurrency tax legislation
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