A California resident is suing three Asia-based banks, accusing them of failing to perform basic checks that could have prevented cryptocurrency fraudsters defrauding him of nearly $1 million.
In a lawsuit filed in a California district court on December 31, 2024, Ken Liem’s attorneys claim that their client was the victim of a hog slaughter scam after being contacted about a cryptocurrency investment opportunity on LinkedIn in June 2023.
Liem’s lawyers said their client convinced an alleged cryptocurrency fraudster to transfer funds over several months under the pretense that they would invest on Liem’s behalf.
His lawyers said the funds went into accounts at Hong Kong banks Fubon Bank, Chong Hing Bank and Singapore-based DBS Bank, and the fraudsters then routed the funds to other third-party accounts.
Lawyers are accusing the bank of failing to conduct proper know-your-customer (KYC), anti-money laundering and other standard checks that could have raised concerns about account holders, preventing them from opening the accounts in the first place.
Three banks were accused of failing to carry out basic checks that could have prevented cryptocurrency fraudsters from opening accounts. source: pacer monitor
The lawyers argue that the banks likely knew through a simple review that there was a “high probability” that the account holders had “intended to defraud victims” and that “there is absolutely no credible evidence that their business activities were legitimate or lawful.” “It would have been revealed,” he claimed.
“The bank defendants appear to have turned a blind eye to the movement of illicit funds from the United States to numerous Asian companies whose accounts they hold and process,” Liem’s attorneys said in the lawsuit.
“So it helped extract hundreds of thousands, if not millions, of dollars that funded the hog slaughter scam.”
The lawsuit also accuses banks of failing to comply with the U.S. Bank Secrecy Act, which requires banks to keep detailed records of financial transactions and report suspicious activity to the U.S. Treasury’s Financial Crimes Enforcement Network.
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Liem’s lawyers argue that the bank is subject to the law because DBS operates a branch in California and Fubon and Chong Hing processed transactions through their own bank accounts at U.S. bank Wells Fargo.
The lawsuit also accuses the Hong Kong-based companies that opened the accounts – Richou Trade, FFQI Trade, Xibing and Weidel – of illegally diverting Liem’s funds into third-party accounts.
He is also accused of falsely stating that the funds would be used for cryptocurrency investments. Liem’s attorneys are demanding a jury trial and at least $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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