Court losses bring Greg Lindberg fraud victims closer to restitution

One-time insurance mogul and convicted fraudster Greg Lindberg saw more avenues to appeal a $1.6 billion restitution order close last week.

On Friday, the Court of Appeals for the Fourth Circuit rejected Lindberg’s motion for a stay of the restitution order. The three-judge panel did not comment on the ruling.

Lindberg was sentenced in May to 12 years in prison for running a $2 billion fraud and attempting to bribe the North Carolina insurance commissioner.

On May 28, District Judge Max O. Cogburn accepted the report of a special master and ordered Lindberg to pay restitution of more than $1.6 billion.

Lindberg's attorneys argued that mandatory offsets totaling nearly $2.9 billion reduce the restitution obligation to zero and show an overpayment of roughly $1.24 billion. Lindberg has since found new representation and appeared before Cogburn Aug. 10 on an inquiry of counsel hearing requested by the government.

Lindberg has filed a flurry of motions in a bid to stop the liquidation of his financial empire to pay the judgment. As of Monday, there are 37 docket entries in August alone.

Lindberg appeared before Cogburn with new attorneys Vivek Ramachandran, and Kenneth Barnes. "We're not playing games," Cogburn said at one point, according to reporting by the Charlotte Observer. "This sounds like a delay."

Co-defendant sentenced

Also last week, Cogburn sentenced co-conspirator Christopher Herwig to two years in prison and ordered him to forfeit property worth $842,000. Herwig was Lindberg's chief investment officer.

Herwig worked for Lindberg on an alleged scheme to siphon off millions of dollars from a number of insurance companies through a series of loans and other transactions, then using the money to acquire and operate other companies, according to court documents.

Lindberg directed the scheme and personally benefited from the fraud in part by “forgiving” more than $125 million in loans to himself from the insurance companies that he controlled. Lindberg used his ill-gotten gains to fund a lavish lifestyle, buying private jets, mansions and a 200-foot luxury yacht, court documents say.

In February, a judge in a different case ordered Lindberg to pay $526 million to policyholders in a civil lawsuit originally filed in October 2019 by life insurers he formerly owned: Southland National Insurance Corp., Bankers Life Insurance Co., Colorado Bankers Life Insurance Co. and Southland National Reinsurance Corp.

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InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.