Inside the Vesttoo Fraud (The Madoff of Insurance)

Insurtech startup, Vesttoo presents the following message on their website: “Everything we do is designed to establish trust – in our company, our people, and the products we offer“.

This message of trust remains on the site to this day, despite the company’s own internal July 2023 investigation, unveiling a Vesttoo fraud fit for the big screen. Current court filings indicate that at least 5 internal employees conspired with individuals across 3 external organizations to generate over 60 fraudulent letters of credit (LOCs), totaling over $3 billion in imaginary collateral.

With the implicated employees now officially ousted, existing Vesttoo leadership is desperately attempting to stop the bleeding through Chapter 11 protection. All the while, in a recent October 22, 2023 filing, unsecured creditors are calling for the company’s liquidation.

It’s an evolving story that involves made up personas, forgery and coverups. A story that at times, is almost hard to believe…

Vesttoo Company Timeline

The speed at which Vesttoo went from celebrating unicorn status to being under investigation for one of the largest frauds in reinsurance market history, is nothing short of breathtaking.


Company Is Founded

Insurtech firm Vesttoo is founded by Yaniv Bertele, Ben Zickel and Alon Lifshitz out of Tel Aviv, Israel.

August, 2021

Series A Funding Round

Hanaco Ventures, focused on partnering with early stage Israeli founders, leads a $6 million Series A equity investment round.

November, 2021

Series B Funding Round

Just 3 months after closing their Series A, London-based Mouro Capital and Japan-based MS&AD Ventures complete a $15 million Series B equity investment in Vesttoo. The investment is to be directed at the expansion of the company’s Insurance-Linked Program and boosts their valuation to $300 million.

January, 2022

Sure-Tech Sells Half its Vesttoo Holdings

Sure-Tech Investments R&D Partnership sells half of its Vesttoo holdings for $7 million, locking in a 6x return for the firm. Sure-Tech had originally purchased approximately 4% of Vesttoo back in April 2021 for $1 million.

October, 2022

Series C Funding Round

Vesttoo closes an $80 million Series C late-stage funding round with investments from Mouro Capital, Gramercy Ventures, Black River Ventures, Hanaco Ventures and Goldman Sachs. The privately held company is now officially a unicorn, with a valuation of $1 billion.

Early May, 2023

Sure-Tech Sells Remaining Vesttoo Holdings

Sure-Tech sells its remaining 2% holdings in Vesttoo for $15.7 million. The sale results in a new company valuation of $785 million.

May, 2023

Series D Funding Round is Announced

The company announced they have opened a Series D funding round at a valuation of $1.5-2 billion. They were ultimately unsuccessful and the round did not close.

Mid July, 2023

First Media Reports of Vesttoo Fraud

Media reports emerge suggesting that Santander Bank had denied knowledge of a letter of credit (LOC) posted as collateral by a company Vesttoo supported in an IP transaction.

July 2023

Vesttoo Initiates Internal Investigation

The Vesttoo board retain DLA Piper LLP (US) and Kroll Associated UK to support a full internal investigation into the alleged LOC fraud.

August 1, 2023

Layoffs Announced

Company announces that it will close their APAC offices and layoff 75% (150/200) of their employees by the end of August.

August 9, 2023

Ami Barlev is Named Interim CEO

In response to the allegations, board member Ami Barlev is announced as the new Vesttoo interim chief executive officer.

August 14, 2023

Chapter 11 Bankruptcy Filing

In light of Aon Affiliate, White Rock requesting $136.7 million in restitution, Vesttoo applies for Chapter 11 bankruptcy protection in Delaware.

August 27, 2023

Co-founders Yaniv Bertele and Alon Lifshitz Are Fired

Co-founders Yaniv Bertele (CEO) and Alon Lifshitz (CFE) are officially let go from Vesttoo,

September 7, 2023

First Interim Chapter 11 Report Filing

Vesttoo leadership files first interim, internal investigation report as part of their Chapter 11 update. In it, significant LOC related fraud is outlined in great detail.

September 14, 2023

Tel Aviv District Court Rules in Favor of Vesttoo

The company wins a restraining order and two injunctions filed with the district court in Tel Aviv, effectively freezing the funds of the former accused co-founders and involved employees and resulting in the foreclosure of $30,8 million.

October 22, 2023

Creditors Make Case for Liquidation

Creditors issue a court filing insisting that Vesttoo liquidate its remaining funds so that they can pursue future potential litigations against those involved in the fraud.

Operational Model Breakdown (How It All Works)

To fully comprehend the alleged fraud that took place, you first need to have a basic understanding of the insuretech space and the specific services that Vesttoo provides.

First, it’s worth noting that the insurtech industry in general has been attracting massive interest and investment over the past few years. This is in no small part due to the recent advancements in artificial intelligence and machine learning.

Both of these advancements have enabled tech-forward companies to automate and reimagine the insurance marketplace. And that’s exactly what Vesttoo set out to do.

The Vesttoo Marketplace was established to connect global insurance markets (cedents) with global capital markets (investors), via reinsurance transactions.

A visual diagram of an example transaction flow for a frequent Vesttoo transaction.
Source: Source: Vesttoo Ltd.

Under this operational model, cedent refers to any insurance company looking to transfer a portion of the risk and premium of an existing policy. In doing so, the cedent shares their financial exposure and risk of a given policy with a second insurer.

By offloading some of this risk, the cedent can reduce the amount of reserves held on their own books, meaning they can take this capital and go out and pursue new business (i.e. underwrite additional insurance).

The cedent effectively transfers this risk to a transformer entity (such as Aon’s WhiteRock) via a Reinsurance Agreement. These are called ‘transformer’ entities because they take this insurance risk and transform it into an investable equity security via a segregated cell.

WhiteRock (and other transformers) then sell this equity security to the Vesttoo Bay Funds entity, who shares in ownership of the segregated cell with an investor.

It’s this final piece that completes the marketplace, as investors can quickly and easily access insurance investments through the Vesttoo platform – investments that were historically a challenging asset class to obtain access to.

Underpinning this entire ecosystem is Vesttoo’s propriety AI-technology that supports data-driven risk management for all of the parties involved.

It is this technology that truly separated Vesttoo from other reinsurance companies. At least in theory. By having an outsized advantage in their ability to assess risk, they claimed they could help insurance companies obtain lower cost reinsurance from investors.

Fraud Allegations

OK. Now we understand a little bit more about how Vesttoo operates.

But where exactly in this transaction flow did the fraud take place?

It’s important to understand that part of the agreements related to the segregated cells include an agreement for collateral security.

This collateral is essentially proof of a sum of money that is “posted to support a reinsurer’s financial obligation to its cedent(s)” and is represented by what is known as a letter of credit (LOC).

The LOC comes from the bank involved in the transaction and in simple terms, it is the bank’s way of backstopping the investor. Ultimately, the LOC guarantees the cedent they will get their payment.

In mid-July 2023, Santander Bank was presented with an LOC for $77,750,000 by a company involved in a Vesttoo facilitated transaction.

There was just one problem – Santander denied any knowledge of the document.

In retrospect, this is the exact moment that the entire house of cards began to come crashing down.

Internal Investigation

According to Vesttoo, almost immediately after this information was brought to the board’s attention, DLA Piper LLP (US) and Kroll Associated UK were retained to support a full internal investigation into the alleged LOC fraud.

Notably, the first interim report findings from this investigation are detailed in Vesttoo’s 36-page Chapter 11 filing made on September 7, 2023.

The interim Piper and Kroll report findings were nothing short of a bombshell.

“With the investigation reaching its final stage what is clear is that pervasive and systematic misconduct has been identified both by a limited set of Vesttoo executives, and others within their sphere of influence, including external entities and individuals.”

– Vesttoo Ltd., et al.., “Debtors’ First Interim Report – Case 23-11160-MFW.” The United States Bankruptcy Court For The District Of Delaware, September 7, 2023,

The report specifically names Yaniv Bertele (co-founder and CEO), Alon Lifshitz (co-founder and Chief Product Officer), Ehud “Udi” Ginati (Senior Director of Capital Markets), Joshua Rurka (Senior Director of Capital Markets) and Tal Eli Ezer (Finder) as the internal Vesttoo employees involved in the conspiracy.

It also names external individuals associated with Yu Po Holdings Ltd., China Construction Bank (CCB) and Standard Chartered Bank (SCB) as playing key roles.

Infographic detailing the implicated Vesttoo employees, organizations and banks involved in the Vesttoo fraud.

The investigators go on to note that of the 65 transactions closed with collateral since 2020, a total of $3.358 billion in LOCs were issued from CCB, SCB and Santander Bank.

Insanely, the vast majority of these LOCs were determined to be fraudulent.

The implicated Vesttoo employees have since been let go from the company. They are accused of everything from creating fictitious personas (one by the name of “Alex Garcia”), forging documents and forging signatures.

Despite these findings, Bertele and Lifshitz have vehemently denied any wrongdoing.

And yes, it is true that the Tel Aviv District Court’s approval for Vesttoo to seize $30 million in assets back in September 2023 from the co-founders is a poor leading indicator for the duo. But in the end, a much larger legal proceeding will be required before any official sentences are handed down.

What Does the Future Hold for Vesttoo?

Vesttoo leadership have made a concerted effort to paint this conspiracy as contained to a handful of bad actors, both inside and outside of the company.

And for good reason. The board is trying to build favor with the regulators as they attempt to keep the business on life support.

But on the outside looking in, and as someone who has read over 100 pages of court filings on the matter, I find this position rather hard to believe.

From their own Chapter 11 filing, the company’s internal investigation reveals that there have been red flags as far back as 2021:

“For example, due diligence reports from December 2021 and April 2022 revealed that Yu Po had a limited profile for an investor with $3 billion of investment capacity. 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.”

– Vesttoo Ltd., et al.., “Debtors’ First Interim Report – Case 23-11160-MFW.” The United States Bankruptcy Court For The District Of Delaware, September 7, 2023,

In addition, Vesttoo has no real business or revenue to speak of given that all past reported revenue was fraudulent.

This is the exact point that the unsecured creditors have made in their recent October 22, 2023 filing, calling for the company’s liquidation and referring to the company as “the Madoff of insurance”.

Where do you stand?

Should current Vesttoo leadership, who were with the company while this fraud was executed, be given the opportunity to try and turn the business around?

Or do you stand with the unsecured creditors and believe “the Vesttoo brand is now toxic in the industry and cannot be rehabilitated”?

Let me know your thoughts in the comments section below!


Keith X. Donovan

Hey, I’m Keith! Since 2011, I’ve been working for and with startups. More recently, I’ve founded a few websites and rediscovered my love for storytelling.  Startup Stumbles is where I get to fuse these two passions. I hope you’ll discover what I have – that failures are often far more informative and interesting than accomplishments.

Leave a Comment