A Texas man is suing the financial giant Citibank for allegedly enabling scammers in a $20 million pig butchering scheme.
Pig butchering scams typically involve scammers gaining the trust of victims over time to convince them to invest digital assets or cash into fraudulent websites that they control.
Michael B. Zidell says in newly filed court documents that he was contacted on Facebook in early 2023 by someone claiming to be a California business owner named Carolyn Parker.
Zidell says he perceived a romantic relationship developing with Parker, who told him that she had invested in non-fungible tokens (NFTs) on a website called “OpenrarityPro.com” and made millions of dollars in investment gains.
Zidell sent 43 wire transfers totalling $20 million to different accounts to “make a market” for NFTs on OpenarirtyPro.com as Parker had instructed. Of those, 12 transfers worth nearly $4 million were sent to one Citibank account called Guju, Inc.
A month or so after Zidell started investing, OpenrarityPro.com displayed his account as being worth more than $300 million, but when he tried to withdraw some of the funds, he was told he’d have to send more money to cover a “risk deposit,” according to the court documents.
In late April, the OpenrarityPro.com website disappeared, and Zidell began to suspect he was the victim of fraud.
Zidell’s lawyers argue in the court documents that Citibank didn’t exercise thorough due diligence on the Guju account.
“In the account opening documents for Defendant Citibank’s accounts for Guju, Inc., their customer states that it will receive no wire transfers, and the total value of the wires it would out would be less than $250,000 per month. In fact, the wires they say they will send are $8,000 transfers to China. The reality was obviously different. The account received no less than twelve (12) wires from Plaintiffs and dozens from others. Some of the outbound wires exceeded $2,000,000.00. Even worse, the account stated an annual gross revenue of $300,000 and Guju received more than 12 times that amount from Plaintiffs alone in two weeks. The first wire from Plaintiffs exceeded Guju’s stated annual revenue by almost 50%.”
Zidell’s lawyers also argue Citibank operated recklessly and provided “substantial assistance” to Parker and her co-conspirators by opening bank accounts and providing services.
“Defendant is liable as an aider and abettor as it, directly or indirectly, knew of the tortious conduct of the NFT Enterprise because the transactions at issue expressly contradicted the account opening documents and violated… ‘red flags.’ Defendant materially aided the seller or issuer of a security and are, therefore, jointly and severally liable with the seller or issuer and to the same extent as the seller or issuer.”
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