On April 4, 2024, PLF attorney James Bonebrake won a victory for his client, Scott Jacobson, in arbitration against Citibank. The case has been the subject of two NBC Channel 5 News investigative reports due to the onslaught of fraudulent transactions pilfering consumer bank accounts like Scott’s and occurring across the country in recent years.  Bank security technology has often failed to keep up with the ingenuity employed by bad actors who are constantly trolling online for vulnerable customers and holes in security systems.  Furthermore, banks like Citibank have often refused to return to their clients the monies stolen through these online fraudsters. The NBC video detailing Scott’s case and Jim’s successful work on it to recover Scott’s monies taken from his account at Citibank by fraudsters, can be found on the PLF website.  

Scott was the holder of a special checking account at Citibank intended to pay for costs incurred to take care of Scott’s adult sister suffering from Alzheimer’s.   The account had existed for years, and Scott even had a “wealth relationship manager” assigned to him at Citibank supposedly to oversee the account.  In October 2021 and in the year prior to it, there was over $150,000 in the account.  These funds were not touched that entire year prior because the monies were intended only as a “rainy day” fund for when Scott’s sister’s caretaker and other expenses might increase.  Furthermore, no wire transfer had ever been issued by Scott or anyone else on the account at any time before 2021.

Suddenly, between October 8 and October 13, 2021, three wire transfers totaling $121,500 were executed to a bank in Bangkok Thailand from the account by a person unknown to Scott.  Scott discovered the fraudulent transfers when he routinely checked his account balance at a Citibank ATM machine on October 14, 2021.  In shock at seeing his funds depleted, he immediately filed an affidavit with Citibank, swearing that the monies had been fraudulently removed.  However, Citibank refused to return the monies to the account.  Because Scott’s phone had likely been “phished” or hacked by a fraudster impersonating Scott to complete the transfers, Citibank asserted that the transactions were not Citibank’s fault and that they reasonably followed all federal and state laws when they allegedly confirmed the transfers via texts to Scott’s phone and via one email.  However, Citibank allowed the texts and email to be destroyed and never produced them to Scott, relying instead on internal business records created on the dates of the transfers “confirming” that the texts and email had, in fact, been sent and responses received from Scott on those same dates.

At the arbitration hearings in February 2024, Jim presented expert witness and other testimony and documents on behalf of  Scott to prove  that Citibank did not behave in a commercially reasonable manner under the  Uniform Commercial  Code and other applicable laws when it failed to preserve the actual texts and emails, it failed to prove that it employed multifactor authentication to confirm that it was Scott and not a fraudster making the transfer requests, and it failed to  employ a computer algorithm system that should have “red-flagged” these transactions as high risk and requiring further confirmation, since no wire transfers (let alone international wire transfers for over 80% of  the total funds in the account) had ever been requested previously.  Finally, Jim argued that the bank violated federal pre-transaction disclosure rules pertaining to international consumer wire or “remittance” transfers, as well as the terms of Citibank’s own contract with Scott.

After the hearing, the arbitrator in April 2024 found in favor of Scott and against Citibank on all substantive issues and awarded him the full $121,500.00 in stolen monies from the account, $18,089.00 in interest due to Scott being deprived of the funds for almost two years due to Citibank’s refusal to return the monies, and $37,552.50 in attorneys’ fees because of Citibank’s intentional destruction of crucial evidence at a time when it knew the transactions were being challenged by Scott as fraudulent.  

Citibank is now appealing the arbitrator’s ruling.  Jim is confident that a three-member arbitration panel will affirm the arbitrator’s well-reasoned decision and that Scott’s money will be restored and his out-of-pocket expenses returned to him.  Jim credits Scott with having the courage to take on Citibank.