Sacked Vesttoo CEO denies knowledge of fraud, says investigation conflicted

Former Vesttoo CEO Yaniv Bertele has claimed no knowledge of the “document falsification” that occurred at the company, seeking to distance himself and co-founder Alon Lifschitz from the fraud, while also claiming that the Board investigation is conflicted given a connection to auditor Kroll.

As reported first by Calcalist, Bertele sent a long message to employees of Vesttoo in which he denied any involvement in the alleged fraud or forgery of letter of credit (LOC) documents that were supposed to provide collateral for reinsurance deals the insurtech had facilitated.

Bertele’s message mentions “falsehoods” about him and Vesttoo that have been spread, again hinting at media leaks, likely from someone on the Board of the company.

“Since the spread of rumors and lies has crossed all boundaries, I’ve decided to break my silence and share these thoughts with you,” his message stated.

“Alon (Lifshitz) and I, both individually and collectively, were entirely unaware of any document falsification in transactions and we certainly didn’t fake any documents. We did not engage in deception, theft, or any of the actions attributed to us!” Bertele explained.

He said the process to exclude them from the company was planned “to shift blame onto us and tarnish our reputation and names.”

Going on to say that the internal audit and investigation, which we had already reported some weeks back was being undertaken by Kroll, has a conflict of interest.

Bertele said that, “The investigation, which commenced with our support and encouragement, under the aegis of a reputable Israeli investigative body – Meitar, one of the largest and most renowned law firms in Israel – was abruptly replaced after a mere five days. It was transferred to another investigative body entangled in a clear conflict of interest. This body maintains close personal connections and had been involved in the company’s affairs even before the investigation.”

Echoing some of his previous comments in statements, Bertele also said, “This investigation serves one singular purpose – protecting the board members and executing a hostile takeover of the company in an unprecedented manner. We were targeted, tried, accused, and swiftly condemned even before the investigation commenced. We and our families are devastated and in anguish.”

Finally of note, Bertele looks to shift the onus of KYC onto the brokers and insurers involved in deals where Vesttoo had sourced collateral, saying, “As many of you are aware, all of Vesttoo’s relationships with the capital market were managed through a network of intermediaries and distributors. They constituted the company’s pipeline. The obligation to scrutinize the adequacy of those documents falls on the insurance companies and brokers. The emerging crisis took everyone by surprise. Everyone, including us!”

That network of investment sourcing and capital introducing people and entities remains one of the lesser discussed pieces of the whole Vesttoo fraud puzzle. We understand that certain investors from Hong Kong and China that Vesttoo had worked with, were sourced by members of this network, potentially including the already named Yu Po Holdings group.

At this stage, with the industry still grappling for clarity and dealing with the loss of reinsurance capacity in many cases, what really matters is getting the findings of Vesttoo’s internal investigation out, plus securing the all-important legal discovery from all the parties involved in the chain of the fraudulent letters of credit (LOCs), including the banks involved, the mysterious Hong Kong investor group named Yu Po and those that sourced that specific capital relationship for Vesttoo in the first place.

At that stage, those who have suffered and are creditors to Vesttoo may have more clarity, meaning any criminal proceedings can be directed more accurately at those who really knew about and instigated the fraud.

Read all of our coverage of the alleged fraudulent or forged letter-of-credit (LOC) collateral linked to Vesttoo deals.