An elderly Briarcliff Manor man claims he lost more than $1.5 million in retirement funds because Citibank employees at the Chappaqua branch did not notice suspicious activities.
Louis Markatos, 80, accused Citibank of breach of contract in a complaint filed Feb. 2 in U.S. District Court, White Plains, and demanded at least $1,511,700.
“Citibank proudly promotes all that it does to protect its elderly customers,” the complaint states, “but, inexplicably, it did absolutely nothing here.”
Citibank spokesperson Colin Wright declined to comment on the allegations.
Markatos says he opened a Citibank savings account in 1998.
He claims that fraudsters — posing as Apple tech support personnel and officials from the U.S. Federal Reserve and Charles Schwab Corp. — targeted him in January and February 2023 and convinced him that his accounts were under threat from foreign computer hackers.
The swindlers persuaded Markatos to liquidate his Schwab holdings, transfer the funds to his Citibank account and then move the funds to two purportedly safe accounts owned by the Fed at two Hong Kong banks. Once the hackers had been neutralized, the funds would be repatriated to the original retirement accounts.
Markatos liquidated $1,511,700 from retirement accounts at Schwab, Muriel Siebert & Co., and BNY Mellon / Pershing, according to the complaint. He deposited the funds into a personal savings account that previously had a balance of less than $1,000, at Citi’s Chappaqua office.
Then he moved the $1,511,700 to the Hong Kong banks in seven wire transfers in 24 days.
In 25 years, the complaint states, Markatos had no history of frequent or high-dollar transactions, and he had never used an international wire transfer.
Markatos says he interacted directly with Citibank personnel who reviewed his account but, allegedly, never questioned or discussed the unusually large, suspicious and out-of-character transactions.
His attorney, Jeffrey S. Gavenman of Maryland, states in the complaint that Citibank ignored standard banking practices and anti-money laundering procedures.
For instance, he says the federal Bank Secrecy Act requires banks to file suspicious activity reports for transactions of $5,000 where there is no business or apparent lawful purpose, the funds go to a known financial secrecy haven, or the actions are inconsistent with the customer’s history.
He says it has also become standard practice for banks to monitor transactions by elderly customers for evidence of exploitation.
“Citibank simply ignored blatant evidence that Mr. Markatos was being exploited,” the complaint states.
The allegations dovetail with a lawsuit filed against Citibank by New York Attorney General Letitia James on Jan. 30.
James claims that Citibank has not implemented strong online protections to prevent fraudsters from taking over accounts. Citibank has also misled customers about their rights, after accounts are hacked and funds are stolen, the attorney general alleged, and has illegally denied reimbursement to fraud victims.
“Scammers have diverted millions of dollars from New York consumers,” the Manhattan federal court complaint states, “as a direct result of Citi’s illegal and deceptive practices.”
