(Bloomberg) — A woman’s ill-fated attempt to buy diamonds in New York City with a debit card linked to Russian bank accounts has landed Square Inc. in court.
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A Florida resident who says she spent $645,000 at a West 47th Street store in Manhattan’s Diamond District claims in a lawsuit she never got her gems and the payment processing company won’t return her money after concluding the purchase would violate US sanctions on Russian banks.
Maria Zurabova, a US citizen with friends and family in Russia, filed her complaint Friday in San Francisco federal court, where Square is based. Zurabova says she made her purchases at Royal Star Inc. about a year ago using cards linked to Russian banks, including Alfa-Bank. She says she held the accounts because she occasionally traveled to Russia before the invasion of Ukraine.
Square received Zurabova’s funds before any sanctions of Russian banks were in place and, in any case, she argues her use of money held in the Russian bank was, and remains, legal.
“Despite the fact that none of the sanctions affected Zurabova’s transactions, Square claimed that Alfa Bank was sanctioned and that therefore it could not process Zurabova’s purchase,” according to her complaint, which includes invoices and says the company has illegally held her money for almost a year.
Alfa-Bank was included in sanctions issued on March 26, 2022, more that two weeks after Zurabova says she bought the diamonds and jewelry, and even then only covered transactions involving debt or equity, not debit card purchases, she argues. Instead of transferring the money to the merchant, or returning them, “Square retained the funds and has refused to return it or even offer any reasonable explanation as to why,” according to the complaint.
Square representatives didn’t immediately respond to a request for comment.
The case is Zurabova v. Block, 23-cv-00953, US District Court for the Northern District of California (San Francisco).
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