Judge grants delay for Greg Lindberg to prepare fraud defense

A North Carolina judge granted Greg Lindberg a delay Friday in one of several ongoing civil and criminal cases.

Lindberg’s trial on federal fraud charges will be called in November under a new timeline accepted by Judge Max O. Cogburn. The February 2023 indictment 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.

Lindberg, convicted in May for a second time on bribery charges and fighting numerous civil complaints, including one by the Securities and Exchange Commission, asserted he was unprepared for the federal case. The trial had been set for a docket call this week.

“This matter involves an alleged complicated financial fraud,” Lindberg’s attorneys wrote. “The Indictment in this case is 48 pages and consists of more than 204 numbered paragraphs. Discovery in this matter is extremely voluminous, and counsel for Mr. Lindberg needs additional time to review and analyze discovery material, confer with Mr. Lindberg, and prepare the case for trial.”

Government attorneys did not object to the motion to move the trial.

Lindberg is 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.

Lengthy prison terms possible

The money laundering and wire fraud charges alone carry maximum punishments of 20 years in prison; the conspiracy to defraud the government count, 10 years.

Cogburn initially ordered a delay in the trial last summer, adopting a schedule calling for a status conference in the case to take place in “the trial term commencing three months after the conclusion” of Lindberg’s bribery retrial.

From no later than 2016 through at least 2019, Lindberg and others allegedly conspired and schemed to defraud various insurance companies, other third parties, and ultimately thousands of insurance policyholders, court documents say.

Lindberg allegedly deceived the North Carolina Department of Insurance and other regulators, evaded regulatory requirements meant to protect policyholders, concealed the true financial condition of his insurance companies, and “improperly used insurance company funds for his personal benefit,” the Department of Justice said in a news release.

In particular, the indictment alleges that Lindberg personally benefitted from the fraud in part by using insurance company funds to finance his lavish lifestyle, including the purchase and refinancing of personal real estate and “forgiving” more than $125 million in loans from his affiliated companies to himself to fund his personal expenses.

The charged conduct caused substantial financial hardship to the insurance companies, third parties, and thousands of policyholders, the DOJ said. Lindberg allegedly caused the insurance companies to engage in investments of nearly $2 billion as part of his scheme, most of which remained outstanding as of September 2022.

Regulators take over insurers

Since 2019, multiple insurance companies controlled by Lindberg have been placed into rehabilitation or liquidation.

In December 2022, one of Lindberg’s top executives, Christopher Herwig, pleaded guilty in a related case to conspiring with Lindberg and others to commit wire fraud, investment advisor fraud, and money laundering as well as to the making of false statements in the business of insurance.

It has been a tough couple weeks in court for Lindberg. First, a $524 million judgment decision went against him. That was followed by an SEC petition asking a federal judge to force Lindberg to explain what happened to a missing $57 million from his former insurance companies.

Lindberg’s publicist has not responded to multiple requests for comment.

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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.