A Citibank client filed a lawsuit against the bank, alleging it took no action to prevent a scam that led to a loss of $20 million.
Overview of the Lawsuit Against Citibank
The lawsuit was filed in federal court in Manhattan, where plaintiff Michael Zidell accuses Citibank of neglecting its obligations. He claims the bank allowed him to deposit millions of dollars into accounts held by scammers.
Scam Originating from Social Media
Zidell reported that the scam began in early 2023 when he was contacted on Facebook by a woman named 'Carolyn Parker'. She convinced him to invest in NFTs, claiming she had made millions through such investments.
Neglect of Warning Signs
The lawsuit claims Citibank processed 12 transfers totaling around $4 million to a company called Guju Inc. The bank is accused of ignoring 'red flags' in Guju's accounts and of inadequate security measures.
The lawsuit highlights the critical importance of proper monitoring and banks' obligations in the fight against fraud. Recent data shows romance scams have become a multibillion-dollar problem in the U.S.
