An elaborate scam targeting an older California couple drained more than $18.5 million from their investment and bank accounts and funneled it to a cryptocurrency exchange, where it then disappeared, according to a lawsuit alleging Charles Schwab Corp., Bank of America and Unchained Trading failed to protect the pair.
Lawrence Liu, 84, and his wife, Ling-Ling Liu, 76, contend their "stable, unassuming life was thrown upside down in mid-2024 when a series of cataclysmic events sent them into peril," according to a civil lawsuit filed Wednesday in U.S. District Court for Northern California.
In July, a scammer liquidated from the couple's Schwab portfolio numerous long-held stocks and then, over a few months, prompted over $29.5 million to be transferred from their accounts to outside financial institutions, the lawsuit alleges.
The scam also involved $22 million in transfers from the Lius' Bank of America account to Unchained, where $18.5 million was converted to bitcoin and quickly withdrawn, the lawsuit contends.
"This case arises from the calculated and devastating abuse of vulnerable elders, committed by financial institutions that are required to — but which failed in this instance to — prevent the very type of anomalous and suspicious fraudulent activity visited upon" the suburban Los Angeles couple, the complaint alleges.
They seek compensatory and punitive damages against the institutions for the "grave economic harm" they've suffered, according to the suit.
The Lius held accounts at TD Ameritrade, now part of Schwab, for decades, crafting "a sizeable investment portfolio valued at tens of millions of dollars that belied their very modest lifestyle," the complaint states.
In May, their accounts were transitioned to Schwab following Schwab's TD Ameritrade acquisition, according to the lawsuit, which suggests that a "Charles Schwab insider" — potentially a TD Ameritrade employee or employees who transitioned to Schwab — violated the couple's trust.
In July, while checking on the couple's accounts on the Schwab website, Lawrence Liu received a pop-up message on his computer warning that the accounts had been compromised and were under attack by an unknown source, the complaint contends. The message instructed him to contact Schwab to secure the accounts, the suit says.
That day, Liu communicated with someone identifying himself as a Schwab representative who discussed the couple's holdings, "providing confidential information that only an insider at Charles Schwab would know" about the Lius and their investments, according to the complaint, which calls this person the "Schwab Threat Actor."
The Lius don't know whether the scammer is a Schwab insider, working with Schwab insiders or whether Schwab or predecessor TD Ameritrade suffered an undisclosed data breach akin to a publicly announced August 2023 Schwab/Ameritrade breach that occurred as the companies transitioned millions of confidential client files, the suit says.
"What is known, however, is that the Schwab Threat Actor had an astonishingly accurate amount of confidential information about Plaintiffs and their holdings at Charles Schwab which, upon information and belief, would require inside access to Charles Schwab's files and client databases," the lawsuit contends.
