Billionaire insurance magnate Greg Lindberg is not going down quietly, filing a lawsuit recently against the state insurance commissioner he was convicted of bribing.
Filed in U.S. District Court for the Middle District of North Carolina, the lawsuit repeats much of Lindberg's defense at his criminal trial. Lindberg accuses Insurance Commissioner Mike Causey, who wore a wire and cooperated with the FBI, of "abuse of power and breach of the public trust."
Lindberg, a Durham, N.C., billionaire, was convicted March 5 of using the promise of millions in campaign money to bribe Causey. Lindberg owns Global Bankers Insurance Group, a managing company for several insurance and reinsurance companies.
The federal jury also found Lindberg associate John Gray guilty on two public corruption charges. Associate John Palermo was found not guilty. Lindberg and Gray could be sentenced to up to 20 years in prison for one of the charges and up to 10 additional years on the other.
As his defense team claimed during the trial, Lindberg's lawsuit claims he was set up and framed by Causey.
Those lawyers argued at trial that Causey had a strong motivation for entrapping Lindberg: The insurance company magnate was the largest financial supporter of Causey's chief political opponent -- former insurance commissioner Wayne Goodwin, who Causey narrowly defeated in the 2016 election.
'Could Not Forgive'
Lindberg donated at least $9,500 to Goodwin during the 2016 race, according to state records.
"Causey could not forgive Plaintiffs for supporting former Commissioner Goodwin’s reelection campaign," the lawsuit said. "He also could not ignore the threat that Plaintiffs and their financial resources posed to him. Causey knew he needed to sideline Plaintiffs, and Lindberg in particular, in advance of the 2020 elections."
Causey has declined comment on the lawsuit.
The lawsuit zeroes in on a $110,000 contribution Lindberg allegedly made to the Causey campaign.
"After confronted, Causey admitted this story was not true," the lawsuit said. "These false statements precipitated a federal investigation into Lindberg and his businesses, including Global Growth and GBIG Capital."
Still, the lawsuit claimed Lindberg entered into a memorandum of understanding with state insurance officials with strict terms regulating his companies' investment program.
"To Plaintiffs’ amazement, and with no notice, Causey and his team reneged on key provisions of the Memorandum in early August 2018," the lawsuit stated. "The Memorandum had authorized principal protected notes as a vehicle for Plaintiffs to maintain their investment strategy. Causey and his team put Plaintiffs in a vulnerable position by renouncing the Department’s agreement to allow principal protected notes."
As a result, Lindberg and his companies lost access to credit markets, which led to his business empire crumbling. Lindberg's North Carolina domiciled insurance companies were placed into rehabilitation in June 2019.
"Plaintiffs have suffered economic losses in excess of $500 million due to Causey’s arbitrary and
capricious actions," the lawsuit claimed. The lawsuit asks for damages and a jury trial.
The trial hinged on hours of secretly recorded conversations between Causey, Lindberg and his associates. Jurors also heard extensive testimony from Causey, who cooperated in the federal sting and wore a clandestine recording device to capture his conversations with the defendants.
Over the course of the eight-day trial inside Charlotte's century-old federal courthouse, prosecutors contended there was abundant evidence to show what Lindberg and his associates wanted for their money: They wanted Causey to reassign the senior regulator who oversaw one of Lindberg's companies.
The recordings played for the jury showed that Lindberg and his associates repeatedly urged Causey to move Jackie Obusek, the deputy N.C. insurance commissioner responsible for regulating Lindberg's company. They contended Obusek was unjustly hurting the reputation of Lindberg's companies and hampering their ability to make investments and acquisitions in other states.
The recordings also revealed that the defendants promised Causey that they would send him millions in campaign contributions, initially through an independent expenditure committee and later through the North Carolina Republican Party.
Ultimately, the Republican Party did transfer $250,000 to Causey's campaign.
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.