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California resident Ken Liem has accused three banks of failing to perform adequate checks that could have blocked the scammers from opening accounts in the first place.
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A California resident is suing three Asia-based banks over allegations they failed to conduct basic checks, which could have prevented crypto scammers from defrauding him of nearly $1 million.
In a lawsuit filed in a California district court on Dec. 31, 2024, attorneys for Ken Liem say their client was the victim of a pig butchering scam after being contacted on LinkedIn in June 2023 about a cryptocurrency investment opportunity.
Liem’s attorneys say their client was persuaded to transfer funds over several months to the alleged crypto fraudsters under the guise they would invest on his behalf.
His attorneys say the funds then went into accounts at Hong Kong banks Fubon Bank Limited, Chong Hing Bank Limited and the Singapore-based DBS Bank Limited, and the then scammers sent them to other third-party accounts.
The lawyers are accusing the banks of failing to perform adequate Know Your Customer (KYC), Anti-Money Laundering and other standards checks that would have raised concern about the accountholders, preventing them from opening accounts in the first place.
Three banks are being accused of failing to perform basic checks that would have prevented alleged crypto fraudsters from opening accounts. Source: PacerMonitor
The lawyers allege the bank likely knew there was “a high probability” that the account holder “intended to defraud victims,” given a simple review “would have revealed a complete lack of credible evidence that their business activities were lawful or legitimate.”
“Banking Defendants appear to have drawn a blind-eye toward illicit proceeds moving from the United States to a plethora of Asian entities whose accounts they custodied and handled,” attorneys for Liem said in the suit.
“And thus assisted in the extraction of hundreds of thousands of dollars, if not millions, that funded pig-butchering scams.”
The suit also accuses the banks of failing to comply with the US Bank Secrecy Act, which requires financial institutions to keep detailed records of financial transactions and report suspicious activities to the US Department of Treasury’s Financial Crimes Enforcement Network.
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Liem’s attorneys argue that the banks are subject to the Act because DBS maintains a branch in California, and Fubon and Chong Hing processed the transactions through his bank account at US bank Wells Fargo.
The suit also names Hong Kong-based business entities that opened the accounts, Richou Trade Limited, FFQI Trade Limited, Xibing Limited and Weidel Limited — accusing them of unlawfully diverting Liem‘s funds to third-party accounts.
They are also accused of falsely stating that funds would be used for cryptocurrency investments. Liem’s attorneys seek a jury trial and a minimum of $3 million in damages.
Fubon Bank Limited, Chong Hing Bank Limited and DBS Bank Limited did not immediately respond to requests for comment.
Richou Trade Limited, FFQI Trade Limited, Xibing Limited and Weidel Limited could not be reached for comment at the time of publication.
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This article first appeared at Cointelegraph.com News
