Forged LC Case Underscores Need for Due Diligence

Shockwaves went through the reinsurance industry when reports surfaced in July 2023 that employees of the Israeli insurtech Vesttoo Ltd. (Vesttoo) allegedly forged close to USD 3.2 billion in clean irrevocable letters of credit (LCs) to support reinsurance collateral obligations that Vesttoo arranged. Within weeks, Vesttoo filed for bankruptcy in Delaware.

On 13 August 2025, the Vesttoo bankruptcy trustee filed suit against the participants in the fraud alleging that 88 forged LCs and two forged collateral letters amounting to USD 2.8 billion were purportedly issued by China Construction Bank Corporation (CCBC), one of the world’s largest banks, through its New York branch, to support Vesttoo reinsurance arrangements.  Under the doctrine of respondeat superior, CCBC and its Asian Subsidiary (CCB Asia) were also named as defendants.