The recent class-action lawsuit filed by Letidas Logistics LLC against Citibank, N.A. (Citi) and Royal Bengal Logistics, Inc. (RBL) has unveiled a shocking tale of corporate greed, systemic fraud, and the exploitation of vulnerable communities.
This case is about a Ponzi scheme orchestrated by RBL and it’s also about the alleged complicity of one of the largest financial institutions in the United States—Citibank.
The lawsuit accuses Citi of knowingly enabling and facilitating RBL’s fraudulent schemes, which defrauded over 1,500 investors of $112 million according to the Securities & Exchange Commission (SEC)
The Fraudulent Schemes
At the heart of this case are two fraudulent schemes orchestrated by RBL: the “Equipment Scheme” and the “Loan Scheme.” Both were marketed as high-yield investment opportunities but were, in reality, classic Ponzi schemes designed to siphon money from unsuspecting investors.
The Equipment Scheme
RBL lured investors with promises of owning semi-trucks or trailers through a five-year lease program. Investors were told their funds would be used to purchase and operate these vehicles on their behalf, generating guaranteed monthly lease payments and eventual ownership.
However, instead of purchasing new trucks as promised, RBL used investor funds to cover operational losses and pay returns to earlier investors. Many investors never received the trucks they were promised, and those that did found them to be old and nearly worthless.
The Loan Scheme
This scheme offered short- and long-term investment opportunities with guaranteed returns ranging from 12.5% to an astronomical 325%. Investors were assured their funds would be used to grow RBL’s trucking operations.
In reality, these funds were diverted to speculative securities trading or misappropriated by RBL executives for personal gain.
Targeting Marginalized Groups
What makes this case particularly egregious is that RBL specifically targeted Haitian-American communities in South Florida, as well as first responders.
These groups were lured with promises of financial security and high returns—promises that turned out to be lies.
Citibank’s Role
While RBL orchestrated the schemes, Citibank is accused of playing a critical role in enabling their execution. According to the lawsuit, Citi not only maintained RBL’s accounts but also had actual knowledge of the fraudulent activities taking place.
Red Flags Ignored
From as early as January 2022, Citi flagged RBL’s account for suspicious activity, including high transaction volumes inconsistent with RBL’s stated business model. Internal notes labeled transactions as “FRAUD HIGH PRIORITY,” yet Citi continued to approve deposits and withdrawals.
By March 2022, account activity ballooned to over $5 million in monthly transactions—far exceeding the $250,000–$500,000 balance initially indicated by RBL.
Active Facilitation
Despite these red flags, Citi allegedly allowed RBL to continue using its banking platform to perpetuate the schemes. The lawsuit claims Citi’s actions—or lack thereof—lent an air of legitimacy to RBL’s fraudulent activities, making it easier for RBL to deceive investors.
Financial Incentives
Why would a reputable bank like Citibank enable such blatant fraud? The lawsuit suggests that Citi was motivated by financial gain. By maintaining large deposit accounts like RBL’s, Citi benefited from fees, interest income, and other financial perks—profits that came at the expense of defrauded investors.
Economic Fallout
The economic impact of this fraud is staggering.
Over 1,500 investors lost a collective $112 million—money that was often their life savings or retirement funds.
The majority of these victims were Haitian-Americans residing in South Florida, many of whom now face financial ruin.
Impact on Local Economies
When individuals lose significant amounts of money due to fraud, the ripple effects extend beyond personal finances. Local economies suffer as victims cut back on spending, businesses lose customers, and community trust erodes.
Wealth Disparity Exacerbated
This case highlights how corporate misconduct disproportionately affects marginalized communities. By targeting Haitian-Americans and first responders—groups already facing systemic inequalities—RBL and Citi exacerbated existing wealth disparities.
Corporate Ethics on Trial
This lawsuit is not just an indictment of RBL but also a damning critique of Citibank’s corporate ethics. It raises serious questions about how financial institutions handle fraud detection and their responsibilities toward customers.
Aiding and Abetting Fraud
The lawsuit accuses Citi of aiding and abetting RBL’s fraudulent activities by failing to act on clear signs of misconduct. This is not just negligence; it is complicity in a scheme that devastated lives.
Breach of Fiduciary Duty
As a financial institution entrusted with safeguarding customer funds, Citi had a fiduciary duty to act in good faith. Its failure to intervene—or worse, its active facilitation—represents a gross breach of this duty.
Neoliberal Capitalism at Work
This case is a textbook example of how neoliberal capitalism enables corporate greed at the expense of societal well-being. Under this system:
- Profit Trumps Accountability: Financial institutions prioritize revenue generation over ethical considerations.
- Regulatory Gaps: Weak oversight allows bad actors to exploit loopholes.
- Concentration of Power: Large corporations wield disproportionate influence over regulatory bodies, making meaningful accountability rare.
Demanding Accountability
While this lawsuit seeks damages for victims, it also underscores the urgent need for systemic reforms to prevent such scandals in the future.
Stronger Regulations
Financial institutions must be held accountable for their role in enabling fraud. This includes stricter anti-money laundering (AML) policies and harsher penalties for non-compliance.
Transparency Requirements
Banks should be required to disclose internal investigations into suspicious activities publicly or at least notify affected customers when fraud is suspected.
Empowering Victims
Victims must have access to legal recourse without prohibitive costs. Class-action lawsuits like this one are a step in the right direction but must be supported by broader systemic changes.
A Call for Justice
Citibank must answer for its actions—not just in court but also in the court of public opinion. And as consumers and citizens, we must demand better from those who hold power over our financial systems. Because if we don’t hold corporations accountable now, who will stop them from doing even greater harm tomorrow?
sources:
[1] https://www.sec.gov/enforcement-litigation/litigation-releases/lr-25755
[2] the attached PDF 🙂