Aon captive files fraud lawsuit related to Vesttoo
Aon’s White Rock Insurance has filed a lawsuit in the New York Supreme Court claiming a total of minimum $140 million in damages from the China Construction Bank (CCB) for the losses related to Vesttoo collateral fraud, according to a court filing.
The lawsuit was submitted by White Rock against China Construction Bank (CCB) on August 27, 2024. White Rock alleged that CCB and its related companies issued letters of credit (LOC) representing “more than $2.8 billion of collateral CCB now refuses to honour”.
The filings are also against a banker claiming to represent CCB. According to the filings, the banker allegedly used “an official CCB email account”. These actions caused White Rock to “justifiably rely on” the banker's “representations to their detriment”. White Rock alleged that CCB “harboured a fraudster” and “failed to deter, prevent and detect a massive fraud committed through those channels”.
Based on what White Rock described as “fully collateralised by rock-solid letters of credit” from “leading international banks”, it transferred at least $140 million in premiums to Vesttoo. The money was paid into “designated segregated accounts established under White Rock Bermuda’s corporate structure”.
However, White Rock claimed that in July 2023 it emerged that the “issuing banks refused to honour the LOCs”. The company said this left Vesttoo with over $3 billion of “useless collateral”.
In the filings, White Rock said that as a result of CCB’s negligence and the said banker’s fraudulent acts and omissions—“for which CCB is directly and vicariously liable—White Rock and the Cedents suffered (and continue to suffer) at least hundreds of millions of dollars in damages, including the lost premium amounts, incurred claim amounts, and legal fees.”
White Rock is seeking to recover at least the cost of its $140 million in premiums paid to Vesttoo, as well as its legal fees and all other related costs and damages.
In the filings, White Rock said: “The fraud’s shockwaves were felt throughout the global insurance marketplace, and Vesttoo quickly spiralled into Chapter 11 bankruptcy.”
Did you get value from this story? Sign up to our free daily newsletters and get stories like this sent straight to your inbox.
