As the audit and investigation into the discovery of fraudulent or forged letters of credit (LOCs) linked to collateralized reinsurance transactions facilitated by Vesttoo moves towards its third week, media outlet Artemis reported that the FBI has begun its own investigation into the matter.
A criminal investigation was always likely, given the far-reaching implications of what appears to be a sophisticated fraud involving letters of credit (LOCs) from a major international bank.
As a recap, a still ongoing audit at insurtech Vesttoo found that multiple letters of credit (LOCs) are potentially fraudulent, all of which appear to be issued by the same bank, while a later statement from Vesttoo said that its “procedures were circumvented.”
The allegations suggest that the fraud was instigated through the use of forged letters of credit (LOCs) issued by the China Construction Bank (CCB).