Aon’s White Rock sues China Construction Bank over fraud linked to Vesttoo

Aon’s White Rock Insurance has filed a lawsuit against China Construction Bank (CCB) and its affiliates yesterday, alleging involvement in a multi-billion-dollar fraudulent scheme orchestrated with the now-bankrupt insurtech startup Vesttoo . Vesttoo, an Israeli startup founded in 2018, claimed to offer a platform for insurance companies to obtain reinsurance coverage at competitive rates through the capital markets.

The lawsuit, filed in the Supreme Court of New York, states that White Rock was misled into engaging in reinsurance transactions, believing they were backed by legitimate letters of credit (LOCs) issued by CCB. However, in July 2023, CCB refused to honor these LOCs, exposing the scheme as a fraud.

White Rock accuses CCB and its former employee, Chun-Yin Lam, of enabling the fraud by providing and verifying false LOCs. Lam used an official CCB email, offices, and its New York branch to transmit and confirm fraudulent LOCs, leading White Rock to rely on these assurances. “The banker, Chun-Yin Lam, transmitted and then verified the LOCs to White Rock, always using an official CCB email account and often using CCBNY to issue the LOCs. He also held meetings at a CCB office and used an authentic CCB telephone number. By giving Mr. Lam access to its email domain, offices, and telephone system (and then breaching its duty to supervise him), CCB bestowed its full faith and credit on Mr. Lam. By so doing, CCB caused White Rock and others to justifiably rely on Mr. Lam’s representations to their detriment.”

According to White Rock, the fraud could not have succeeded without CCB’s involvement, and the company is seeking damages exceeding $140 million.

Vesttoo, once valued at $1 billion in 2022, faced allegations of misstated collateral in 2023, resulting in executive resignations, lawsuits, and a Chapter 11 bankruptcy filing.