Report calls for Lindberg to pay $1.6B in restitution in fraud case

Former top NC political donor Greg Lindberg could pay $1.6 billion in restitution in connection with his guilty plea in an insurance fraud case, according to a court document filed Friday.

The case is separate from Lindberg’s conviction in May 2024 on bribery and fraud and charges related to a scheme targeting North Carolina’s elected insurance commissioner.

Lindberg and the federal government are jointly asking a federal judge to bifurcate, or split, his sentencing in the two cases from the process of sorting out restitution in the fraud case.

“The restitution issues involved in this case are complex and involve hundreds of millions of dollars and multiple classes of potential victims,” according to a court filing from lawyers representing Lindberg and the US attorney’s office. “It is anticipated that the restitution issues in this case may require a lengthy hearing or hearings.”

“Other than the restitution aspects of this case, Mr. Lindberg is ready for sentencing in both cases,” the court filing added. “Mr. Lindberg and the United States respectfully request that the Court bifurcate the sentencing hearing in this case from any hearing(s) involving issues of restitution.”

“Specifically, the parties request that the Court schedule the sentencing hearing after it enters a preliminary restitution order but before any necessary hearings to finalize restitution,” lawyers for Lindberg and the federal government continued. “This approach will allow the sentencing hearing to move forward and for the final details regarding restitution to be determined sometime thereafter.”

The court filing about Lindberg’s sentencing arrived on the same day that special master Joseph Grier filed a 35-page report addressing restitution in a “massive insurance fraud conspiracy.”

Grier’s filing asked for a court order “narrowing the unresolved issues concerning restitution as this Case heads toward sentencing.”

“Not only would such an order vastly simplify the sentencing process in this Case, but it will also facilitate resolution of the other restitution questions thereafter remaining, primarily those concerning the payment priority — and precise recipients — of future restitution payments to be made by the Special Master in this Case,” according to the court filing.

Of eight names listed as possible recipients of restitution, more than half of the money ($821 million) would be designated for CBL, an insurance company with 122,485 policyholders. Another $406 million would go to the PBLA and ULICO insurance companies.

Lindberg pleaded guilty in November 2024 to federal charges connected to a scheme government officials described as a $2 billion fraud.

He admitted to charges of “conspiracy to commit offenses against the United States and conspiracy to commit money laundering in connection with a scheme to defraud insurance regulators and policyholders through a web of companies based in North Carolina, Bermuda, Malta, and elsewhere,” according to a news release from US Attorney Dena King.

The scheme, taking place between 2016 and 2019, involved a conspiracy “to defraud various insurance companies, other third parties, and ultimately thousands of insurance policyholders,” according to the news release.

“To carry out the conspiracies, Lindberg and others engaged in circular transactions among Lindberg’s web of entities using insurance company funds and made and caused to be made various materially false and misleading statements and representations to and omitted material information from regulators, various ratings agencies, insurance companies, insurance policyholders, and others regarding these transactions,” the release added.

“Lindberg directed the scheme and personally benefitted from the fraud in part by ‘forgiving’ more than $125 million in loans to himself from the insurance companies that he controlled,” the government news release explained.

The guilty pleas involve one count of conspiracy to commit offenses against the United States, including wire fraud, investment adviser fraud, and crimes in connection with insurance business, and one count of money laundering conspiracy. Those two counts together carry a maximum prison sentence of 15 years.

Lindberg also faces resentencing in the bribery case. The 4th US Circuit Court of Appeals freed Lindberg from federal prison after throwing out his original seven-year sentence in that case.

US District Judge Max Cogburn is overseeing both cases.

“Greg Lindberg and his co-conspirators misused $2 billion of company funds in their international scheme to defraud corporate victims, regulators, and policyholders,” said Principal Deputy Assistant Attorney General Nicole Argentieri, head of the Justice Department’s Criminal Division. “Thousands of policyholders suffered substantial financial hardship as a result of Lindberg’s fraud scheme, which left multiple companies in or on the brink of liquidation. The Justice Department will not hesitate to hold corporate executives accountable when they threaten critical sectors of the economy, like the insurance industry, to enrich themselves.”

“Lindberg created a complex web of insurance companies, investment businesses, and other business entities and exploited them to engage in millions of dollars of circular transactions. Lindberg’s actions harmed thousands of policyholders, deceived regulators, and caused tremendous risk for the insurance industry,” King said in the news release. “Today’s guilty plea affirms our commitment to protecting the public from predatory financial schemes and bringing to justice those who betray public trust for personal gain.”

Cogburn issued an order in September 2024 approving forfeiture of more than $1.4 million tied to the bribery case.

A jury found Lindberg and co-defendant John Gray guilty in May 2024 in a retrial on federal bribery and fraud charges.

Cogburn’s order applied to funds the FBI seized while investigating Lindberg and other defendants. The order indicated that the money was tied directly to the attempted bribery of state Insurance Commissioner Mike Causey after the 2016 election.

Causey helped federal authorities make their case against Lindberg. That included the insurance commissioner wearing a surveillance wire during conversations with Lindberg.

Cogburn’s order specifically cited $979,128.63 in a Wells Fargo bank account under the name North Carolina Growth and Prosperity Alliance Inc., along with $475,629.82 in a separate Wells Fargo account under the name North Carolina Growth and Prosperity Committee Inc.

“Defendants set up and controlled the entities that held the Funds, opened Wells Fargo accounts in the names of the entities, and funded the accounts of the entities for the express purpose of bribing the North Carolina Commissioner of Insurance and hiding the source of funds used to bribe the Commissioner,” Cogburn wrote.

Cogburn detailed a “scheme by the conspirators to bribe the North Carolina Insurance Commissioner so he would remove a staff member who was overseeing investigation of Lindberg’s insurance companies.”

“At the retrial, the Court admitted recorded conversations and corresponding transcripts involving the conspirators, testimony, and documentary evidence on the conspirators’ plan to create entities with some level of anonymity to hold the Funds provided by Lindberg and to then use the Funds to bribe the Commissioner to remove an employee overseeing the regulation of Lindberg’s companies,” Cogburn explained.

“Indeed, Defendant Gray noted in a recorded conversation that, although another individual would be in-charge of the entities on paper, Defendants Gray and Lindberg would direct the entities and the entities would provide anonymity as to the source of the moneys directed to the Commissioner,” the judge continued.

“Thereafter, the Funds were deposited, in the form of a $500,000 check and a $1,000,000 check from Lindberg, into the accounts from which the FBI ultimately seized the Funds,” Cogburn wrote. John Palermo, a third defendant in the case, “confirmed via email to Lindberg and Gray that the funds were deposited and that, ‘[i]n essence, for your conversations with [the Insurance Commissioner], the 2 entities are ready to go.’”

Lindberg, Gray, Palermo, and a fourth defendant were joined for the original trial in February and March 2020. One defendant, former state Republican Party Chairman Robin Hayes, entered a guilty plea before the trial. Then-President Donald Trump pardoned Hayes in January 2021. A jury acquitted Palermo.

The jury convicted Lindberg and Gray. Lindberg faced a seven-year prison sentence. Gray was sentenced to 30 months in prison. The 4th US Circuit Court of Appeals later threw out both convictions in June 2022 because of problems related to jury instructions.

Before the legal action against him, Lindberg had attracted attention as a top donor to political campaigns in North Carolina. He supported Democratic Insurance Commissioner Wayne Goodwin’s unsuccessful 2016 re-election bid. Goodwin lost to Causey.

Later Lindberg became the largest financial contributor in 2017 to the NC Republican Party and two groups supporting then-Lt. Gov. Dan Forest, a Republican. Forest lost the 2020 governor’s race to the incumbent Democrat, Gov. Roy Cooper.

“Report calls for Lindberg to pay $1.6B in restitution in fraud case” was originally published on www.carolinajournal.com.