The co-founders of Israeli artificial intelligence startup Vesttoo ran a forgery scheme that included a fake bank employee persona named “Alex Garcia” to obtain billions of dollars in bogus letters of credit for insurance deals, the now-bankrupt company said, WSJ Pro Bankruptcy reported. Vesttoo’s investigation into the fraud allegations that drove it to bankruptcy last month alleged that co-founders Yaniv Bertele and Alon Lifshitz and other senior executives had engaged in a scheme to generate fraudulent letters of credit from China Construction Bank and other financial institutions. The company also said it is considering litigation against China Construction Bank and U.K.-based Standard Chartered based on evidence turned up in the internal investigation that employees at both banks may have been involved in the fraudulent scheme, according to Thursday’s report, filed in the U.S. Bankruptcy Court in Wilmington, Del. It marks Vesttoo’s initial findings into what went wrong at the company. Bertele said in a statement Thursday that he rejects the report’s allegations and that Vesttoo’s investigation “was flawed from the outset and targeted the company’s founders as its objective.” His statement said the investigation was part of a “takeover within the company amidst a dispute between shareholders.” Lifshitz also said the report’s accusations are unfounded and that the investigation was biased and served the interests of other shareholders. Both Bertele and Lifshitz are contesting their dismissals from the company under Israeli law, according to the report.
