Greg Lindberg ordered to pay $1.6 billion to insurers he defrauded

A court-appointed special master is recommending that victims of a massive insurance fraud scheme tied to Greg Lindberg receive about $1.6 billion in restitution, according to a detailed memorandum filed Friday.

The memo describes a years-long conspiracy in which Lindberg and affiliated entities allegedly diverted policyholder funds, misrepresented financial conditions to regulators, and used insurance company assets for personal gain.

In November 2024, Lindberg pleaded guilty to engineering a $2 billion fraud. Lindberg was convicted for a second time in May 2024 of trying to bribe North Carolina Insurance Commissioner Mike Causey.

Lindberg has been held at the Gaston County Jail since Nov. 12, 2024. The U.S Attorney's office is not objecting to a request by Lindberg's attorneys to separate the sentencing hearing from the restitution hearing(s).

In February, a judge 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.

The special master’s report seeks to narrow which parties qualify for restitution and how losses should be calculated, aiming to streamline the upcoming sentencing proceedings.

Fraud scheme and losses

Lindberg's scheme centered on moving funds from insurance companies into entities controlled by Lindberg while masking those transactions. The memo says the conduct led to major financial shortfalls at multiple insurers, harming policyholders, creditors and related entities.

The special master concluded that restitution should focus on companies and policyholders directly impacted by the conduct described in the indictment. Others who made claims for restitution, the memo states, include Lindberg's ex-wife, "one or more" girlfriends, creditors, former partners, and "disgruntled" investors.

"Although Defendant agreed to full restitution ... some nexus must exist between the harm
complained of by the person seeking restitution and the conduct described in the Indictment," the memo says. "These other persons seeking restitution have failed to demonstrate a connection between their alleged damages and the crimes described in the Indictment (or any crime at all)."

Among the most affected were Lindberg's North Carolina-based insurers placed into rehabilitation or liquidation:

• Colorado Bankers Life Insurance Co. reported a deficit exceeding $1 billion.
• Bankers Life Insurance Co. showed a shortfall of roughly $240 million.
• Southland National Insurance Co. had a deficit of about $144 million.

The memo also details significant losses among Bermuda-based insurers tied to Lindberg’s business network, including Northstar Financial Services, Omnia Ltd. and PB Life and Annuity Co.

Policyholder liabilities total about $2.8 billion. That breaks down to $1.8 billion for the North Carolina Insurance Companies as of Feb. 16, and $1 billion for the Bermuda Insurance Companies as of Dec. 31, 2025, according to the memo.

"Policyholder claims not entitled to statutory benefits from the Guaranty Associations have been fully paid by the Special Master in the amount of approximately $157 million from Primary
Restitution Assets and are excluded from the noted $2.8 billion policyholder liability figure," the memo states.

The memo also highlights an ongoing dispute over payment priority. Entities tied to Bermuda-based insurers argue they should be paid after all other victims are fully compensated, while guaranty associations representing policyholders contend they should share equal priority.

Restitution terms outlined

The special master rejected several competing approaches to calculating losses and instead recommended using unpaid loan balances, described as “affiliate investments,” plus a “time value of money” interest component.

That method produces an estimated restitution total of about $1.625 billion, broken down among major recipients:

• Colorado Bankers Life: $821 million
• PB Life and Annuity (including obligations tied to Universal Life Insurance Co.): $406 million
• Northstar Financial Services: $159 million
• Southland National Insurance: $131 million
• Smaller amounts to other affiliated entities

Lindberg disputes the inclusion of interest in the calculation, according to the filing.

To satisfy restitution, the filing estimates that primary assets under court control could yield between $1.16 billion and $1.88 billion, though the total may fall short of covering all losses.

The special master is asking the court to issue a preliminary restitution order identifying eligible victims and their losses, while leaving questions about payment priority and distribution for later.

Interested parties will have 30 days to file objections. Additional rulings on how restitution payments will be allocated are expected closer to sentencing.

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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.