Man accuses banks of illegally seizing funds in crypto clawback scheme

SANTA ANA, California (CN) — A man who says he was unwittingly placed in the middle of a complex cryptocurrency fraud scheme claims the banks that helped facilitate wire transactions have unfairly and illegally punished him by seizing funds from his personal accounts.

The plaintiff, Alex Shah, accuses BMO Bank, Wells Fargo, Citibank and Comerica Bank of violating the California Commercial Code after they obtained control over his personal accounts and disbursed funds without legal authority.

Shah claims the seizures include funds unrelated to the fraud scheme he was a victim of.

The lawsuit, filed in Orange County Superior Court, stems from an agreement that Shah made with another defendant, Nathan Janowicz, who claimed to be a representative of Rec Solar USA, a company based out of San Luis Obispo, California, that is also named as a defendant. Shah agreed that he would receive money transfers from Rec Solar’s corporate clients, convert their funds into Bitcoin and then transmit those funds to designated wallet addresses.

In exchange, Shah, who believed the business transactions were legitimate, would receive a commission.

In May 2025, Shah received wire transfers totaling more than $4 million. At no point during this operation was Shah notified of any suspicious activity from the banks, he says in his complaint.

However, the banks later claimed that the wire transfers were part of a complex business email compromise — a type of high-stakes cyber scam — in which a fraudster impersonated the corporate clients and induced them to direct funds to Shah’s accounts, which he says he was instructed to exchange into Bitcoin. Once in Bitcoin format, the funds become pseudonymous and much harder to trace.

Shah filed a complaint with the FBI in October 2025. The U.S. Secret Service, which is also tasked with investigating financial crimes and fraud, identified Shah as a victim, he says.

No criminal charges have been filed against Shah. Despite this, Shah says that the banks have seized, frozen, disbursed or taken more than $720,000 of his personal funds as part of a coordinated, extrajudicial clawback scheme to recover funds for Kwik Trip, a Midwestern chain of convenience stores.

Shah says the first wire transfer in May 2025, about $990,000, was transferred from Kwik Trip’s Wells Fargo account to Shah’s BMO Bank account. The second wire transfer, 11 days later, about $3.4 million, took the same route. Shah then shuffled the funds from the BMO accounts to his personal Citibank, Wells Fargo and Comerica Bank accounts before transferring funds into Bitcoin.

However, about two weeks after the first wire transfer, Wells Fargo made a unilateral decision without notifying Shah the transfers were fraudulent, he says.

“Based on its unilateral fraud determination, on information and belief, Wells Fargo transmitted recall requests through the interbank wire recovery system directed at BMO and other institutions in the payment chain, communicating as fact to those institutions that ‘both wires were fraudulent,’” he says in the complaint. “Between May 8, 2025, and May 27, 2025, no bank defendant communicated to Shah any concern, flag, warning, hold or inquiry regarding any of the payment orders at issue. Each bank defendant processed each payment order in the ordinary course. No bank defendant filed a suspicious activity report, froze the relevant account or provided any notice that would have permitted Shah to pause the transactions.”

Shah owns multiple businesses with bank accounts associated with the banks he is suing. The businesses are also listed as plaintiffs.

Representatives from the banks that Shah names as defendants did not respond to requests for comment. Rec Solar USA did not respond to request for comment either.