Lindberg request for residential detention hit by prosecutors

Greg Lindberg, former head of Bankers Life Insurance Co., and convicted of a multi-billion-dollar bribery and fraud scheme, wants to serve his sentence at a cozy halfway house near his home in Tampa, Florida, instead of federal prison. But government prosecutors say, “no way.”

In a filing with the U.S. District Court for the Western District of North Carolina, prosecutors said Lindberg’s desire to to be housed in the facility of his choice should be denied.

“Placement in a [residential reentry center] RRC is not detention,” wrote U.S. Attorney Dena J. King. “It is an alternative to detention and a condition of pre-trial release.”

Lindberg, convicted for a second time in May of trying to bribe North Carolina Insurance Commissioner Mike Causey, changed his plea to guilty earlier this month and has pledged to help a special master unwind his billions of dollars in holdings to pay back victimized policyholders. His attorneys said housing Lindberg at the reentry center would make it easier to conduct the asset transfers.

Lindberg lawyer makes his case

“Mr. Lindberg’s ability to help facilitate the duties of the Special Master and take the actions necessary to complete the transfer of assets will require constant communication between Mr. Lindberg and his counsel,” wrote Lindberg’s attorney James F. Wyatt, III. “It will be virtually impossible to do so on an expedited basis while incarcerated in a local jail or prison—as those facilities pose significant barriers to communication. Detention at an RRC will allow Mr. Lindberg to fulfill his obligations to make restitution to policyholders prior to sentencing—as required by his plea agreement.”

Lindberg also told the court 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."

But government prosecutors say Lindberg has already consented to detention while he
awaits sentencing.

“If Defendant wants to withdraw that consent and instead seek a modification of his conditions of pre-sentencing release, he should say so and the parties should move forward to consider the reported bond violations in both cases,” the government’s filing states.

Judge may lack authority

Moreover, prosecutors say the judge in the case likely lacks the authority to determine where the defendant will be imprisoned, leaving that decision up to the United States Marshall Service.

The government also noted that location monitoring devices might not be allowed at the Tampa RRC and thus Lindberg would not really be in custody or subject to the probation officer’s monitoring.

“Defendant’s specific request to be placed in the Tampa RRC because is primarily based upon the Defendant’s convenience and desire to be close to his family, and not on any issues worthy of the special treatment requested,” prosecutors said. “Defendant’s desire to be housed close to his home and family are shared by nearly all defendants that come before this Court. There is no reason to treat this Defendant differently.”

It is not known when the judge will rule on the requests and the government’s opposition.

A federal grand jury indicted Lindberg and two co-conspirators of illegally siphoning millions from his insurance company for his personal use and then lying to regulators to hide the scheme. Lindberg’s original sentence, for which he served 633 days behind bars, was vacated due to improper jury instructions. He now faces 30 years in prison after the second guilty verdict.
Lindberg founded the private equity firm Eli Global and eventually acquired several insurers grouping them as the Global Bankers Insurance Group. Insurance profits soared and enabled Lindberg to funnel $2 billion to Eli Global, according to a Wall Street Journal report. That attracted regulators and initiated Lindberg's downfall.

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Doug Bailey is a journalist and freelance writer who lives outside of Boston. He can be reached at [email protected].