![]() ![]() Some $586 million of collateral for Vesttoo linked reinsurance transactions were supposed to have been sourced from Chinese investor Cheng Yuan Holdings. Reflecting the dedication of a number of other Vesttoo executives, as early as June 2022 (and perhaps earlier), the CFO of Vesttoo believed Yu Po raised “existential” risks to Vesttoo, but these concerns were disregarded angrily by Bertele and any efforts of others to meet directly with Yu Po without Ginati were blocked.”Īnother China based investor, that was named for the first time in yesterday’s filing, Cheng Yuan Holdings, had also raised red flags internally at Vesttoo among some staff, the report states. The report also states, “Although numerous and very serious red flags were raised about Yu Po, including in the face of very substantial evidence that the CCB LOCs, which on their face indicated that they were issued out of New York, were in fact issued out of China, no significant action was taken. He further noted that “this issue is existential for us.” Similarly concerns were expressed by others regarding the irregularity of the Yu Po relationship, however, at every turn Bertele, Ginati and other with the scheme declined to take ever a hint of remedial action.” The report goes on to state that, “In response, Vesttoo’s CFO, Gaurav Wadhwa, noted that “he cannot think of a higher priority task for the company than” further investigation into Yu Po. Remember, Yu Po had provided the majority of the CCB LOCs, which totalled $2.81 billion, while some $3.1 billion of Vesttoo reinsurance transactions had the investor as the backer. The report states that “red flags abounded as early as 2021,” with due diligence reports from December 2021 and April 2022 revealing that Hong Kong based Yu Po “had a limited profile for an investor with $3 billion of investment capacity.” However, it seems those involved worked hard to cover their tracks and distract those Vesttoo staff that were raising the red flags from pursuing them. ![]() We understand there is one more incident related to Citibank, likely the case reported in the above.īut internal red flags were getting raised, that could have potentially resulted in the fraud being caught much earlier. That occurrence was not mentioned in yesterday’s report, although we’re told it still stands, but pales by comparison to the much larger fraud that was ongoing through the last few years at Vesttoo, especially once China Construction Bank (CCB) was involved as provider of letters of credit (LOCs).Īs we reported yesterday, almost $3.36 billion of standby letters of credit (LOC) are potentially involved in the fraud, with $2.81 billion from China Construction Bank, $362.5m from Standard Chartered Bank and $186m from Santander. It’s important to remember that, according to reports, the first signs of fraud at Vesttoo are said to have actually emerged back in 2019, with a fake line of credit that appeared to be from Citibank. However, unless the report into the Vesttoo investigation is itself falsified, there now appears an abundance of evidence to support its claims, although it’s important to note the actual report from Kroll has not been made available, just the court filing which is a summary, at this stage. Vesttoo’s former CEO Yaniv Bertele has responded to the report, with his lawyers saying their client “strongly rejects all allegations,” again stating that this whole affair and investigation is a Board mission to secure a takeover of the company. The report reveals a fraud both sophisticated and at the same time amateur, in its implementation, featuring a tale of faked identities, forged documents, even made up persons, all designed to extract value from clients in the insurance and reinsurance industry, through the provision of fraudulent or forged letters of credit (LOCs) and other documents.Īs we said yesterday, questions remain over where the fraud reaches to and who were the real instigators, or masterminds behind it, but the implication of two Vesttoo co-founders appears clear, as well as of Ginati and Rurka, with a digital trail linking them all to the fraudulent activity, the report claims. ![]() As we were the first to report yesterday, the investigation and audit undertaken within beleaguered insurtech Vesttoo filed an initial report with the bankruptcy court, stating that co-founders Yaniv Bertele and Alon Lifshitz were complicit in the fraud, as well as two executives connected to the network that found capital for the company, Udi Ginati and Josh Rurka. While the industry will spend its time poring over the initial findings of the fraud investigation at Vesttoo, one thing that stands out is the fact internal red flags were raised over the two purported Chinese “investor” groups as early as 2021, while the report also raises a question over whether they are even real investor groups as claimed. ![]()
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