Imagine being a bank and sending someone the wrong Venmo…
Citibank will not be able to rectify one of the biggest blunders in banking history, a US District judge has ruled. The error was an accidental transfer of $900 million by Citibank to lenders of Revlon, a cosmetics company. In the transaction, Citibank was acting as an agent of Revlon. It was supposed to send $8 million in interest payments to lenders of Revlon. But accidentally, it sent an amount that was more than 100 times the original amount.
In August 2020, Citibank filed a lawsuit seeking a return of its money. However, around 10 investment advisory firms have still not returned $500 million of the accidental transfer. The law around the spending of funds received from accidental transfers is usually strict. A Pennsylvania couple has been hit with felony charges for spending money that they had received by mistake. However, New York has an exception to this law and allows for a “discharge-for-value-defense.” The defense allows a beneficiary to keep the money received from an accidental transfer if they are entitled to the money, and they were not aware that it was an unintentional transfer. Revlon’s lenders used this defense as they thought that Citibank was sending the amount as prepayments for a loan that the bank owed them. The judge agreed with the lender’s argument and ruled that Citibank, “a highly sophisticated financial institution,” could not have made this transfer by mistake, and to believe that it was a mistake would be “borderline irrational.”
Back For More: $188 million Powerball Winner sued by ex-Fiancé.
Marie Holmes, a woman from Brunswick Country, North Carolina, had won the $188 million Powerball jackpot back in 2015. This win was the largest jackpot win ever in the history of North Carolina. After taxes, she was able to keep around $88 million of the winnings and made elaborate plans of spending the money.
According to the complaint filed by Lamarr Andre McDow, her ex-fiancé, she had spent a significant amount of the money on him. The complaint states that McDow and Holmes had started dating back in 2012 and eventually had two kids together. In November 2014, McDow was arrested and charged for drug trafficking, and two months later, Holmes won the lottery. Before McDow was convicted and sentenced to ten years in prison, Holmes had bought him a $250,000 Chevy Stingray, clothes, and jewelry with a total worth of $100,000 amongst other gifts. McDow has stated that he made Holmes his power of attorney before he was sentenced and authorized her to store and maintain his possessions. However, once in prison, Holmes broke up with him and sold many of his possessions. According to McDow, this was a breach of her fiduciary duties. He is suing her for compensation for his sold assets. Meanwhile, Holmes’ attorneys have filed a motion to dismiss. Citing numerous deficiencies in the suit filed by McDow, including the lawsuit was filed outside of the three-year statute of limitations.