A California resident is suing three Asia-based banks over allegations they failed to conduct basic checks that might 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 claim 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 that they would invest on his behalf.
His attorneys said the funds went into accounts at Hong Kong banks Fubon Bank and Chong Hing Bank and Singapore-based DBS Bank, and the scammers then 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 concerns about the accountholders, preventing them from opening accounts in the first place.
Three banks are accused of failing to perform basic checks that would have prevented alleged crypto fraudsters from opening accounts. Source: PacerMonitor
The lawyers allege the banks 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, FFQI Trade, Xibing and Weidel — 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, Chong Hing Bank and DBS Bank did not immediately respond to requests for comment.
Richou Trade, FFQI Trade, Xibing and Weidel could not be reached for comment at the time of publication.
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