It's high but not impossible. A friend of mine who is in Columbia University did intern in NYC Barclay IBD during his junior year's summer and he earned around $20k within 10 weeks. 1.2k to 2.5k should be a fair weekly pay for undergraduate interns from target schools.
It is impossible for a intern to make that much. I lived in US around NY region over 10 years and never heard about such thing. I even asked my friend who works in a mid management position at a top 50 company and is a native American. He said it is impossible for a intern to be paid that much in any company in US. Your parents' friend may exaggerate or your parents heard wrong.