July 1, 2025 — A Texas resident, Michael B. Zidell, has filed a federal lawsuit against Citibank, accusing the financial institution of negligence and aiding scammers in a $20 million “pig butchering” romance scam.
The lawsuit, filed on June 24, 2025, in the U.S. District Court for the Southern District of New York, alleges that Citibank failed to act on clear red flags, allowing scammers to siphon nearly $4 million through accounts held at the bank.
This case highlights the growing prevalence of sophisticated crypto-related fraud and raises questions about the responsibilities of financial institutions in preventing such schemes.
The lawsuit details how Zidell was targeted in January 2023 by an individual claiming to be Carolyn Parker, a California-based businesswoman, who contacted him via Facebook.
Over weeks of communication through phone calls, video chats, and the WeChat messaging platform, Zidell developed what he perceived as a romantic relationship with Parker.
She claimed to have made millions through investments in non-fungible tokens (NFTs) on a platform called OpenrarityPro.com and encouraged Zidell to invest similarly.
Between February and April 2023, Zidell made 43 wire transfers totaling over $20 million to various bank accounts, including nearly $4 million to a Citibank account linked to an entity named Guju, Inc.
According to court documents, the platform displayed Zidell’s account as being worth over $300 million at one point.
However, when he attempted to withdraw funds, he was told he needed to send additional money for a “risk deposit.”
By late April 2023, OpenrarityPro.com vanished, and Zidell realized he had been defrauded.
Zidell’s legal team argues that Citibank failed to exercise due diligence and ignored numerous red flags that should have triggered scrutiny under federal Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations.
Specifically, the lawsuit points to the Guju, Inc. account, which received 12 transfers totaling nearly $4 million.
Court documents reveal that the account’s opening documents stated it would receive no wire transfers and would send less than $250,000 per month in wires, primarily $8,000 transfers to China.
The large, round-sum transfers from Zidell were inconsistent with this profile, yet Citibank allegedly failed to investigate.
The complaint further accuses Citibank of “aiding and abetting” the scammers by providing banking services that facilitated the fraud.
Zidell’s lawyers assert that the bank’s negligence and reckless conduct violated its statutory duties, making it jointly liable for the losses.
They argue that the transactions “expressly contradicted the account opening documents and violated… ‘red flags,’” which should have prompted intervention.
The Broader Context of Pig Butchering Scams
Pig butchering scams, a term derived from the practice of “fattening up” victims with trust before defrauding them, have surged in recent years.
These schemes often involve scammers building long-term relationships, sometimes romantic, to lure victims into fraudulent investment platforms, particularly in cryptocurrencies or NFTs.
According to blockchain analytics firm Chainalysis, crypto scams stole approximately $9.9 billion in 2024, with estimates suggesting this could rise to $12.4 billion as more fraudulent wallets are identified.
Romance-based scams alone accounted for over $5.5 billion in losses across 200,000 reported cases in 2024, per security firm Cyvers.
The U.S. Secret Service recently conducted its largest-ever crypto seizure, recovering $225 million tied to pig butchering scams in 2025, underscoring the scale of the issue.
The FBI’s 2024 Internet Crime Report highlighted that pig butchering scams were among the most damaging crypto-related crimes, with victims over 60 losing $2.8 billion.
Citibank has not publicly commented on the lawsuit, consistent with its response to similar allegations in the past.
In a separate 2024 case, New York Attorney General Letitia James sued Citibank, alleging inadequate protections against fraud and failure to reimburse victims, pointing to systemic issues in the bank’s fraud detection systems.
Experts note that banks face significant challenges in detecting sophisticated scams like pig butchering, which often involve AI-generated personas and complex narratives to evade traditional fraud detection systems.
Feedzai, a fraud prevention firm, emphasized that conventional anti-fraud measures relying on static rules may be insufficient against AI-powered scams that mimic genuine human interactions.
Zidell’s lawsuit seeks compensatory damages and legal costs, aiming to hold Citibank accountable for its alleged negligence.
The case is part of a broader trend to scrutinize financial institutions’ roles in preventing crypto-related fraud.
Earlier this year, U.S. authorities, in collaboration with Coinbase, traced and seized $225 million in stolen cryptocurrency, identifying over 130 victims of pig butchering schemes, many operated by Southeast Asian crime syndicates.
The lawsuit also raises questions about the effectiveness of banks’ KYC and AML protocols in the face of evolving fraud tactics.
As pig butchering scams continue to grow, financial institutions may face increased pressure to enhance monitoring and intervention strategies to protect customers.
Back to Daily Market News.
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