A California man who lost over $20 million in a crypto romance scam has filed new lawsuits against East West Bank and Cathay Bank, accusing them of aiding and abetting financial fraud by failing to detect suspicious wire activity.
This follows a similar legal move last week, when the same victim sued Citibank, alleging negligence and failure to act on warning signs.
Victim Alleges East West and Cathay Banks Ignored Red Flags
Michael Zidell, the alleged victim, filed complaints in California federal court claiming both East West Bank and Cathay Bank “turned a blind eye to their statutory obligations.”
- 18 wire transfers totaling nearly $7 million were sent to accounts at East West Bank.
- 13 additional transfers amounting to $9.7 million were wired to Cathay Bank.
These payments were allegedly made to accounts connected to scammers operating a fake NFT investment scheme.
Romance Scam Originated on Facebook With Fake NFT Platform
According to court documents, the scam began in early 2023 when Zidell was contacted on Facebook by someone posing as “Carolyn Parker,” a supposed successful NFT investor. Within a month, their conversation shifted from romantic to financial.
Zidell claims Parker convinced him to invest in a non-fungible token (NFT) platform, promising high returns. Over time, he wired a total of 43 payments across multiple banks—more than $20 million in all.
By April 2023, the platform had vanished, along with Zidell’s funds.
“Romance scam. Rug pull. Pig butchering. These are just some of the terms to describe the scam that befell the Plaintiffs,” the complaint reads.
Banks Accused of Enabling Securities Fraud and Elder Abuse
Zidell’s lawsuits argue that Cathay and East West acted as “aiders and abettors” by offering banking services to the scammers, including account setup and wire transfers—without raising internal red flags.
Key accusations include:
- Failure to monitor large, round-number transactions.
- Negligence in detecting suspicious activity.
- Violation of elder abuse statutes, which apply to individuals aged 65 and older under California law.
The complaint against East West and Cathay adds this elder abuse angle, which was not included in the Citibank filing.
Zidell Seeks Damages in Jury Trial
Zidell is pursuing compensatory damages, legal costs, and interest, and has requested a jury trial. Legal observers say the outcome could set new precedents for how financial institutions must monitor crypto-related activity—particularly when involving vulnerable or elderly customers.
The cases now spotlight the responsibility of banks in preventing digital asset fraud, a growing issue amid rising crypto scams worldwide.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.