- Michael Zidell lost $20M in a sophisticated crypto scam.
- Lawsuits claim banks failed to flag fraudulent wire transfers.
- The scammer used a fake identity to lure Zidell into NFT fraud.
Michael Zidell, who lost $20 million in a crypto scam, has sued both East West Bank and Cathay Bank, alleging negligence by these banks that should have been able to sniff out the fraudulent transactions. This is after his previous suit against Citibank, which was filed on June 24, 2025, in New York. According to Zidell, the banks did not pay attention to straightforward warning indications, and the scammers used their accounts to withdraw millions.
Lawsuits Target Bank Negligence
Zidell claims that he sent almost 7 million dollars in 18 bank transfers to an account at the East West Bank and more than 9.7 million dollars in 13 transfers to Cathay Bank. These came after four million dollars were wired into Citibank accounts, amounting to twenty million dollars lost in a pig butchering scam. The lawsuits were filed in a federal court in California on July 1, 2025, and allege that the banks did not investigate suspicious activity even when the banks received huge transactions of round sums that ought to have triggered investigations.
This fraud started in January 2023 when Zidell received a message on Facebook, purported to be from Carolyn Parker, a Californian businesswoman. She gained trust over months of WeChat video calls and messaging and persuaded Zidell to invest in a bogus NFT site, OpenrarityPro.com. In April of 2023, the website was taken down, and Zidell’s funds were no longer available.
According to legal papers filed by Zidell, the banks failed to comply with their federal Know Your Customer and Anti-Money Laundering requirements. He says that the banks had given the fraudsters a free hand by opening accounts and transferring money without questioning them. The lawsuits seek compensatory damages and legal fees.
Allegations of Elder Abuse and Fraud
In contrast to the case of Citibank, Zidell sues East West and Cathay Bank on the grounds of encouraging elder abuse, but his age is not indicated. The California law covers people aged above 65 against such forms of abuse, implying that Zidell might be included in this category. The complaints allege that the banks had acted irresponsibly as scammers took advantage of Zidell because of big transactions being made without obvious anomalies being detected.
As an example, Citibank sent 12 transfers to Guju Inc., which was a company whose account documentation indicated that it would not exceed monthly wire activity of 250,000 dollars. The initial transfer made by Zidell was larger than the annual revenue claimed by Guju, and the bank apparently ignored it, apparently. East West and Cathay Bank also failed to control high-value transfers.
The 2024 Internet Crime Report released by the FBI singles out the increased risk of pig butchering scams, as the annual damages amounted to $5.8 billion in 2022, with $2.8 billion lost by older Americans. Sometimes these scams are based on false romances that are used to attract the victims into making illegal investments. FBI Internet Crime Report 2024
Zidell contacted the Dallas Police Department and the FBI concerning the scam, but not much progress has been made. The most significant seizure made by the Secret Service targeted cryptocurrencies and was worth $225 million linked to similar fraudulent schemes, U.S. authorities said recently. U.S. Department of Justice
The lawsuits highlight how banks are facing pressure to improve their ability to detect fraud. The case of Zidell might establish a new precedent in demanding that financial institutions be liable for failure to protect their customers against advanced crypto-related fraud.
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