Ousted Vesttoo CEO Bertele slams fraud investigation in WhatsApp polemic
Ousted Vesttoo CEO Yaniv Bertele says he was “entirely unaware” of any falsification of documents in an extraordinary WhatsApp message that takes aim at the company’s ongoing fraud investigation.
In a long message sent to current and former staff yesterday and first reported by Israeli outlet Calcalist, Bertele said he had “decided to break [his] silence” and hit out at “falsehoods” he claimed had been spread about Vesttoo and its executives.
"Unfortunately, for quite some time, falsehoods about me and the company have been routinely and systematically spread, either directly to you or indirectly through media leaks. Since the spread of rumours and lies has crossed all boundaries, I've decided to break my silence and share these thoughts with you,” Bertele wrote.
Bertele claimed that both he and former chief financial engineer Alon Lifshitz have been at the centre of an “unprecedented assault” after news first emerged of a collateral fraud.
This publication reported last month that Bertele and Lifshitz had been formally terminated from their roles with the company after being put on leave amid an internal investigation into fraudulent letters of credit (LOCs).
“First and foremost, Alon (Lifshitz) and I, both individually and collectively, were entirely unaware of any document falsification in transactions and we certainly didn’t fake any documents. We did not engage in deception, theft, or any of the actions attributed to us!” he said.
"Due to the fraud that was uncovered, Alon and I have endured more than a month of an unprecedented assault, including a decision-making process that disregards fundamental principles of good governance, secret meetings from which we were excluded, accusations, defamation, and falsehoods. The decisions and statements have one common objective – to shift blame onto us and tarnish our reputation and names," Bertele added.
The statement from Bertele follows news that Vesttoo’s new management – led by interim CEO Ami Barlev – appointed Kroll to run an internal investigation into the fake LOCs and to determine what role insiders may have played.
According to Bertele, the investigation was first entrusted to Israeli law firm Meitar but was reassigned to Kroll in an attempt to “execute a hostile takeover of the company”.
"It's important for you to know that the investigation, which commenced with our support and encouragement, under the aegis of a reputable Israeli investigative body – Meitar, one of the largest and most renowned law firms in Israel – was abruptly replaced after a mere five days. It was transferred to another investigative body entangled in a clear conflict of interest. This body maintains close personal connections and had been involved in the company's affairs even before the investigation. After two weeks of inquiry, it issued recommendations and interim findings, concluding that the board was inadequately informed. Ask yourselves – whose interests are being safeguarded by this conclusion?" he said.
He continued: "The same investigative body, after a month-long investigation that consisted of a solitary one-hour Zoom meeting with us, the company's founders, hastily determined that we should be terminated immediately and stripped of our rights. It didn't present us with the investigation's findings or provide any opportunity for us to respond.
“This investigation serves one singular purpose – protecting the board members and executing a hostile takeover of the company in an unprecedented manner. We were targeted, tried, accused, and swiftly condemned even before the investigation commenced. We and our families are devastated and in anguish."
The Israeli insurtech filed for Chapter 11 bankruptcy protection in August in a Delaware court and has faced litigation from broking giant Aon and its Bermuda-based segregated cell platform White Rock Bermuda to force discovery and recover funds paid to the firm.
The fallout to the wider industry has been broad based, with fronting companies and MGA platforms whose capacity is ultimately sourced from Vesttoo scrambling to replace the fake capacity.