Risk register · entry
Q-F · FraudVesttoo LOC fraud
'Collateralised' reinsurance where the bank letters of credit were forged.
The fifth quadrant, where the thing was never real. The tell is that the story is too clean.
Why this quadrant
Collateralised reinsurance is meant to be the safe version. A fixed letter of credit stands behind a defined risk so the counterparty's health stops mattering. Roughly 4 billion dollars of those letters were forged. The instrument that removes the counterparty question had become the counterparty question.
The record
- Total forged letters of credit approximately $4 billionlikely
- White Rock (Aon) filing: 37 letters of credit worth about $2.35 billion flagged as likely invalidlikely
- China Construction Bank accused of fabricating over $2.8 billion of the LOCsuncertain
- Total creditor claims in Vesttoo bankruptcy reached $4.8 billionlikely
- Expected creditor recovery under confirmed plan: less than $100 million (roughly $77-88 million plus $6-48 million contingent on litigation)likely
- Santander shown a fraudulent $77.75 million letter of credit around mid-July 2023, triggering discoverylikely
- Chapter 11 petitions filed in Delaware on August 14-15, 2023certain
- Co-founders Yaniv Bertele (CEO) and Alon Lifshitz removed from executive roles August 3, 2023, later officially firedcertain
- Kroll investigation named Bertele, Lifshitz, Udi Ginati, and Josh Rurka as directly involvedlikely
- Chapter 11 liquidation plan confirmed in Delaware bankruptcy court late February 2024likely
Sources
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