May 10 (Reuters) - U.S. insurance and home inspection

software provider Porch Group ( PRCH ) is suing China Construction Bank

Corp (CCB), the country's third-biggest lender by

assets, for allegedly enabling a "massive fraud" that caused

"monumental losses" for Porch.

Porch and its units accused the Chinese lender of

conspiring with employees of the now bankrupt Israeli insurance

firm Vesttoo to issue dozens of fake reinsurance letters of

credit that guaranteed insurance companies access to reinsurance

funds, according to a complaint filed to the U.S. Southern

District Court of New York on Thursday.

Porch and its unit, the Homeowners of America Insurance Co,

paid tens of millions of dollars in premiums for this

non-existent reinsurance until it emerged in July 2023 that

certain letters of credit backstopping Vesttoo's reinsurance

transactions were fake, the company said.

CCB didn't immediately respond to a request for comment from

Reuters.

Vesttoo filed for Chapter 11 bankruptcy protection in the

U.S. last year after discovering fake letters of credit had been

used on its platform. The company provided insurers with access

to so-called insurance-linked securities, an alternative form of

reinsurance. These securities may be backed by collateral in the

form of letters of credit.

Porch said the Homeowners of America lost tens of millions

of dollars when its reinsurance facility, backed by a false $300

million letter of credit from the CCB, suddenly proved

worthless.

Porch's complaint said it would seek monetary damages in an

amount to be determined at trial. However, the complaint said

Homeowners of America had to pay out $80 million to cover

insurance claims that should have been reinsured and Porch had

to provide $57 million to stabilize the unit and Porch's stock

price fell after the scandal broke.