Greg Lindberg changes course, pleads guilty to $2 billion fraud

(UPDATE: This story was updated Wednesday afternoon with a comment from Insurance Commissioner Mike Causey.)

The lengthy saga of troubled financier and onetime Bankers Life Insurance Co. owner Greg Lindberg entered a new phase Tuesday when Lindberg pleaded guilty to engineering a $2 billion fraud.

Lindberg, convicted for a second time in May of trying to bribe North Carolina Insurance Commissioner Mike Causey, also pledged to help a special master unwind his extensive holdings to pay back long-suffering policyholders.

Lindberg was to surrender to U.S. Marshals Service Tuesday and requested to be placed in a residential holding facility near his Tampa, Fla. home.

Doing so, Lindberg told the court, will help him and his representatives transfer “in the immediate future, billions of dollars of assets into the hands of receivers or a Special Master for full payment of restitution to all policyholders and other entities entitled to restitution.”

In the more than five years since his initial indictment on bribery charges, Lindberg fought every legal point through a team of attorneys and investigators.

Convicted in 2020 on bribery and fraud charges, along with associate John Gray, Lindberg served 633 days behind bars before the conviction was vacated due to improper jury instructions. Lindberg and Gray face 30 years in prison after their second guilty verdict.

Causey released the following statement Wednesday:

"Greg Lindberg’s guilty plea should serve as a warning to anyone who considers defrauding an insurance company or its policyholders that the consequences will be severe. His guilty plea includes a promise to make full restitution to his victims. It is another step in the process of getting all policyholders repaid. The North Carolina Department of Insurance and I will continue to work with the federal prosecutors to ensure that all avenues are being pursued and that any money recovered through the restitution and forfeiture process will be used to repay the policyholder victims. My commitment to consumer advocacy and being a watchdog for North Carolina’s insurance consumers is stronger than ever. I am pleased to see their interests being protected.”

'Carefully orchestrated scheme'

Lindberg's Tuesday plea satisfies a 48-page indictment handed down by a federal grand jury in February 2023. It accuses Lindberg and two co-conspirators of illegally siphoning vast amounts of money from Lindberg's insurance companies for his personal use, then lying to regulators to hide their $2 billion scheme.

“The indictment reveals a carefully orchestrated scheme that relied on a web of complex financial investments and transactions designed to evade regulators, disguise the financial health of Lindberg’s insurance companies, and conceal the alleged purpose of the scheme: Lindberg’s personal gain,” said U.S. Attorney Dena J. King at the time of the indictment. “People buy insurance products to provide comfort and security. However, this indictment alleges this was a sophisticated and intricate scheme designed for one reason, to benefit Lindberg."

Lindberg is specifically charged with one count each of conspiracy to defraud the United States, money laundering conspiracy, and wire fraud; four counts of making false insurance business statements to regulators; and six counts of making false entries about the financial conditions or solvency of an insurance business.

The case was investigated by the Charlotte office of the FBI. The money laundering and wire fraud charges alone carry maximum punishment of 20 years in prison; the conspiracy to defraud the government count, to 10 years.

As part of his plea agreement, "Mr. Lindberg has pledged to 'take all necessary and reasonable steps' in his power to secure assets sufficient to pay full restitution to the policyholders of his insurance companies 'no later than 30 days after the issuance of the initial draft presentence report issued by the United States Probation Office in this matter.'"

In his request to be housed in Tampa until he is sentenced, Lindberg notes that he "has eight children under the age of seven who currently live with him in Tampa" and that he "is the sole parent providing care for these children as his fiancé Olivia Molina does not have a U.S. visa and lives in Spain."

Mounting troubles

Lindberg, founder of the private equity firm Eli Global, eventually acquired several insurers and grouped them together as the Global Bankers Insurance Group. Insurance profits soared and ultimately enabled Lindberg to funnel $2 billion to Eli Global, according to a Wall Street Journal report. That attracted regulators and initiated Lindberg's downfall.

Lindberg made a special agreement with former insurance commissioner Wayne Goodwin allowing him to invest up to 40% of his insurance companies' assets into affiliated business entities. In November 2016, Goodwin lost his seat to Causey, who reduced the cap on affiliated investments from 40% to 10%.

Prosecutors say Lindberg and Gray gave, offered, and promised Causey millions of dollars in campaign contributions and other things of value in exchange for the removal of his senior deputy commissioner, who was responsible for overseeing the regulation and the periodic examination of Lindberg’s Global Bankers Insurance Group.

On June 27, 2019, Southland National Insurance Corp., Colorado Bankers Life Insurance Co., Bankers Life Insurance Co. and Southland National Reinsurance Corp. – all owned by Lindberg – were placed in rehabilitation by order of the Superior Court of Wake County, North Carolina.

Since then, regulators have worked to unwind the complex financial web of companies and accounts controlled by Lindberg.

© Entire contents copyright 2024 by InsuranceNewsNet.com Inc. All rights reserved. No part of this article may be reprinted without the expressed written consent from InsuranceNewsNet.com.

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.